Shares of GNC Holdings (NYSE: GNC) finished the last trading day of 2016 with a 64% decline for the year -- its worst full-year performance since its IPO in 2011. The nutritional supplements retailer's sales have fallen due to intense competition from superstores, warehouse retailers and e-commerce sites, as well as due to lawsuits questioning the efficacy of its products.

The key facts

GNC was a much more vibrant company when it went public five years ago. Its stock doubled during its first year of trading, and innovative new products like the diet pill Garcinia Cambogia (developed by TV's Dr. Oz) generated plenty of hype and spurred sales growth.

Unfortunately, recent products haven't garnered as much attention, and the aforementioned challenges from companies like Wal-Mart, Costco, and Amazon are rendering its business model obsolete. As a result, GNC's sales fell 8.1% annually last quarter as comps fell 8.5%. Its primary rival, Vitamin Shoppe (NYSE: VSI), only fared slightly better -- its shares fell 27% in 2016 as comps slipped 1.9% last quarter.

The road ahead

GNC is trying to get back on track with a pricey Super Bowl commercial and an ad campaign in February, but most analysts see it as a desperate, eleventh-hour ploy. Piper Jaffray analyst Sean Naughton called it a "risky marketing decision," noting that people tend to eat unhealthy foods while watching the Super Bowl, making it a poor time to target them with an ad for GNC's wares.

Another potential way out for GNC -- which trades at around 4 times earnings -- would be a sale. The retailer has held talks with Chinese suitors regarding a buyout, but those discussions reportedly stalled due to disagreements regarding the structure of the deal. However, investors shouldn't discount the possibility that the chain could be bought out and added as a store-in-store to a larger superstore or warehouse chain.

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Leo Sun has no position in any stocks mentioned.

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