Disclaimer – we don’t have an M.B.A. – but we have reached this financial conclusion: people like vitamins. Our office’s “guess how many GNC stores there are” game was rocked by the stunning size of the vitamin retailer (and also was marred by our mumbling, which led two contestants to think we said “guess how many GNC stories there are.”)
GNC Holdings Inc., which just filed for an initial public offering worth up to $350 million, is backed by Ares Management and Ontario Teachers’ Pension Plan. They bought the company from Apollo Management LP in 2007 for $1.65 billion.
As for the store count, there were an impressive 7,103 locations at June 30. This included 2,687 company-owned sites in the U.S., 171 company-owned stores in Canada, 892 domestic franchised locations, 1,381 international franchised stores and 1,972 “store-within-a-store” locations under an alliance with Rite Aid Corp. “Our network of domestic retail locations is approximately twelve times larger than the next largest U.S. specialty retailer of nutritional supplements,” the company said in its filing. GNC believes “the U.S. market can support a significant number of additional GNC stores,” and plans to expand its U.S. company-owned retail square footage by 3%.
The company’s results show that the market for Ultra Mega and Pro Performance hasn’t been exhausted yet. GNC said its second quarter marked the 20th in a row with higher domestic company-owned same-store sales. For the six months ended June 30, revenue rose to $920.7 million from $872.3 million in the comparable 2009 period. Net income rose to $51.1 million from $37.4 million while Ebitda increased to $136.5 million from $118.9 million.
Another PE-sponsored nutritional products retailer, Vitamin Shoppe, went public last year. The Irving Place Capital-backed chain, with more than 400 locations, debuted at $17 in October 2009 and closed Monday at $27.60.
