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Individual Article from NBJ issue July/August 1999: Retail & Distribution
Acquisition By Royal Numico Positions GNC For Growth
The $x.xbillion acquisition of General Nutrition Corp. (Pittsburgh, Pa.) by Royal Numico NV, finalized in August, ranks as the largest consolidation yet in the nutrition industry. The transaction gives Royal Numico, a Dutch-based food company focusing on clinically based products, entry into the U.S. market through GNC’s 4,091 specialty stores (including x,xxx company-owned and x,xxx franchised outlets worldwide, of which all but xxx are in the United States).
Currently, the goliath retailer claims to have xx%-xx% of the vitamin and supplement retail market in this country. GNC anticipates adding xxx to xxx new stores in 1999 and 2000. In addition, through Rite-Aid GNC expects to bring on x,xxx “store within a store” outlets over the next three years.
GNC’s alliances with Rite-Aid and drugstore.com also provide Royal Numico with access to the fast-growing drugstore and electronic commerce distribution channels. “From GNC’s perspective, the problem or opportunity was how to adjust its competitive strategy to changing market conditions in the supplement industry,” said GNC spokesman Greg Miller. “From GNC’s strategic point of view, we need to address the mass market without simply becoming a mass market player ourselves. These are two additional legs into the mass market—drugstore and electronic.”
GNC also expects to benefit from Royal Numico’s expertise in clinically-based research on human nutrition. “From our perspective, it is a great fit,” Miller said. “GNC has seen for some time that science is the key, and Royal Numico is a great science partner, because that’s their business. They are a provider of research-based human nutrition products ...
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