Businessweek

GNC Holdings, Inc. operates as a specialty retailer of health and wellness products. The company, through a network of approximately 8,100 locations and online channels, offers health and wellness products, including vitamins, minerals and herbal supplement products (VMHS), sports nutrition products and diet products. The company’s product mix focuses on high-margin, premium, value-added nutritional products, and is sold under GNC proprietary brands, including Mega Men, Ultra Mega, Total Lean, Pro Performance and Pro Performance AMP, and under nationally recognized third-party brands. Segments The company operates in three segments, Retail, Franchise, and Manufacturing/Wholesale. Retail The Retail segment offers products to customers at its company-owned stores in the United States, Canada and Puerto Rico and through its Websites, GNC.com and LuckyVitamin.com. As of December 31, 2012, the company operated 3,188 company-owned stores across all 50 states, including the District of Columbia, Canada and Puerto Rico. Most of its U.S. company owned stores are between 1,000 and 2,000 square feet and are located primarily in shopping malls and strip shopping centers. The company’s Website, GNC.com, offers products that may not be available at its retail locations. Franchise The Franchise segment comprises domestic and international franchise operations, and generates revenues from franchise activities primarily through product sales to franchisees, royalties on franchise retail sales and franchise fees. As of December 31, 2012, there were 2,779 franchise stores operating, including 949 stores in the United States and 1,830 international franchise stores operating in 54 international countries (including distribution centers where retail sales are made). The company’s franchise stores in the United States are between 1,000 and 2,000 square feet, and approximately 90% are located in strip shopping centers. All of its franchise stores in the United States offer both its proprietary products and third-party products, with a product selection similar to that of its company-owned stores. Manufacturing/Wholesale The Manufacturing/Wholesale segment comprises manufacturing operations in South Carolina and its wholesale sales business. This segment supplies its Retail and Franchise segments, as well as various third parties with finished products. The company’s Manufacturing/Wholesale segment sells manufactured products to third parties, and sells its proprietary and third-party brand products to Rite Aid, Sam's Club, PetSmart and www.drugstore.com. The company’s wholesale operations are supported primarily by its Anderson, South Carolina distribution center. Products The company offers a range of nutritional supplements sold under its GNC proprietary brand names, including Mega Men, Ultra Mega, Total Lean, Pro Performance and Pro Performance AMP and under nationally recognized third-party brand names. The company reports its sales in four major nutritional supplement categories: VMHS, sports nutrition, diet and other wellness. In addition, its retail sales offer an extensive mix of brands, including approximately 1,800 SKUs across multiple categories and products. Through its online channels, GNC.com and LuckyVitamin.com, the company offers additional SKUs to online customers. This variety is designed to provide its customers with a selection of products to fit their specific needs and to generate transactions with purchases from multiple product categories. Products are delivered to its retail stores through distribution centers located in Leetsdale, Pennsylvania, Anderson, South Carolina and Phoenix, Arizona. The company’s distribution centers support its company-owned stores, as well as franchise stores and Rite Aid locations. LuckyVitamin.com is supported by a separate distribution center in Leetsdale, Pennsylvania that began operating in December 2011. VMHS The company sells vitamins and minerals in single vitamin and multi vitamin form and in different potency levels. The company’s vitamin and mineral products are available in liquid, tablets, soft gelatin, hard-shell capsules and powder fo