The High Court has appointed provisional liquidators to businesses that operate 11 health food stores across Leinster.
The appointments were made in respect of GNC Well Ireland Unlimited Company and the related THSD Unlimited Company, which have 86 employees.
The businesses traded under the brand “The Health Food Store” across 10 stores and as “GNC” for one store.
The companies are part of the US-based GNC group, a health food retailer that operates more than 4,000 stores in 50 countries.
The 11 Irish stores are located in Dublin, Wicklow and Kildare, while the firms’ head office is based in Nutgrove Park in Rathfarnham, Dublin.
The High Court heard the Irish businesses have been loss-making in recent years and their parent considered they were unlikely to become profitable and commercially sustainable.
The parent, which had been supporting the firms by way of intracompany loans, conducted a strategic review and decided it was no longer prepared to provide any further financial support the firms needed to continue trading.
On Wednesday, Mr Justice Liam Kennedy said he was satisfied to appoint Nicholas O’Dwyer and John Boland, of Grant Thornton, as joint provisional liquidators of the companies.
The judge was satisfied on the evidence before the court that the appointment of provisional liquidators was in the best interests of stakeholders, including the employees.
Seeking the appointments, Stephen Walsh, for the companies, said the companies’ financial situation had deteriorated after the pandemic.
The firms’ latest management accounts show they have significant balance sheet deficits of more than €5.2 million.
Counsel said the stores had found sales to be challenging in recent years.
There had been a 12 per cent drop in sales in the year ending 2021 followed by a 5 per cent drop in 2022.
The firms had also experienced additional challenges including increased business rates, wages increases, the implementation of VAT on products that previously had no VAT, and the increase in costs on certain imported products.
Mr Walsh said the parent had conducted a process aimed at finding a buyer for the Irish businesses but a sale could not be completed.
He said provisional liquidators would help ensure an orderly winding up of the businesses.
The liquidators will able to take steps to secures the stock and liaise with potential buyers with a view to maximising the proceeds available to creditors.
The matter will return to court later this month.