GNC (store)

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GNC Holdings, Inc.
Public
Traded as NYSEGNC (Class A)
Russell 2000 Component
Industry Retail
Founded 1935
Registered: 9/1/1936
Founder David Shakarian
Headquarters Pittsburgh, Pennsylvania, United States
Number of locations
4,691 (U.S. & Canada, 2016)
1,957 (International, 2016)
Key people
Ken Martindale (CEO)
Tricia K. Tolivar (CFO)
Products Nutritional supplements
Revenue Decrease US$ 2.54 billion (2016)
Decrease US$ -172.95 million (2016)
Decrease US$ -286.25 million (2016)
Total assets Decrease US$ 2.07 billion (2016)
Total equity Decrease US$ -95.05 million (2016)
Number of employees
~16,800 (2016)
Website www.gnc.com
Footnotes / references
[1][2]

GNC Holdings Inc. (General Nutrition Centers) is a Pittsburgh, Pennsylvania-based American company selling health and nutrition related products, including vitamins, supplements, minerals, herbs, sports nutrition, diet, and energy products.

History

A GNC store at Promenade

In 1935, David Shakarian opened a small health food store, Lackzoom, in downtown Pittsburgh. He only made US$35 on his first day, but was able to open a second store within six months. A year later, Shakarian suffered from what appeared to be a fatal blow when the Ohio River flooded into downtown on St. Patrick's Day. Both of his stores were wiped out. However, he quickly rebuilt both stores, and opened five more by 1941. The company officially registered as a corporation on September 1, 1936 Shakarian moved into the mail order business during WWII. He said that customers sent him a check and asked him to mail their product as they could not drive to his store due to the gas rationing which happened during WWII. During the health food craze of the 1960s, Shakarian expanded his chain outside Pittsburgh for the first time, and in the process changed its name to General Nutrition Center. He continued to run the chain until his death in 1984. Shakarian took GNC public (listed on the NYSE) in the 1980s. Overexpansion and his death in 1984 resulted in a highly leveraged GNC. The Shakarian family decided to sell GNC shortly after his death. The family brought in a "turn around" executive, Jerry Horn, with instructions to "stop the bleeding" and position GNC to be sold.

In 1990 the company considered relocating but a public/private effort retained GNC headquarters in Downtown Pittsburgh.[3] GNC was taken private and sold to The Thomas Lee Company, a PE investment/management fund in the late 1980s. Thomas Lee ran GNC and took it public prior to selling the company to Royal Dutch Numico and Numico acquired GNC in 1999; it sold GNC to Apollo Management in 2003. Ontario Teachers' Pension Plan and Ares Management bought GNC in 2007. GNC went public in 2011.

In 2018, Harbin Pharmaceutical Group Holding Co., a company controlled by the Chinese government, agreed to acquire an approximately 40% stake in GNC.[4]

Retail stores

GNC store, Ypsilanti Twp., MI

GNC stores typically stock a wide range of weight loss, bodybuilding, nutritional supplements, vitamins, natural remedies, and health and beauty products, in both its owned brands as well as third-party brands. The stores also sell health and fitness books and magazines.

GNC has more than 6,000 stores in the U.S., including 1,100 store-within-a-store locations within Rite Aid, as well as locations in 49 other countries. In addition, GNC LiveWell currently has 41 Stores located in Brisbane, Sydney, and Melbourne in Australia.

Business model

GNC retail stores are a combination of corporate-owned and franchised stores; 950 of the 5,000 domestic US stores are franchises, commonly located within urban shopping malls and shopping zones. In addition to the GNC.com website, GNC's products are sold on drugstore.com.

Lawsuits

In 1998, GNC was accused of purposely running its franchisees out of business in order to "retake" the stores into corporate control.[5] An April 30, 2003 article states that the GNC corporate company was sued by numerous franchise owners.[6] The complaint is that the parent company was allowing their corporate owned stores to sell products for less than the franchise stores are allowed to sell them for. The suit also claimed that GNC charged high "reset fees" to franchisees when there is new signage that needs to be changed in the store or an image facelift that must be done by GNC corporate. A similar lawsuit was filed again in an article written on October 20, 2004.[7]

In February 2015, New York Attorney General Eric Schneiderman sent cease and desist letters to GNC and other major retailers due to concerning laboratory tests regarding the accuracy of the claimed contents of supplements.[8][9] GNC shortly afterwards removed some stock from sales while working with the Attorney General.[10][11] In September 2016, GNC, the New York Office of the Attorney General, and other supplement retailers ultimately came to an agreement and retailers are now accomplishing more robust testing of supplements to ensure accurate labeling.[12][13]

In October 2015, the Attorney General of Oregon filed a lawsuit against GNC alleging that the company knowingly sold products containing the ingredients picamilon and BMPEA, which are banned by the FDA.[14][15][16]

On February 2, 2017, GNC threatened to sue the Fox Broadcasting Company for "significant economic and reputational damages, lost opportunities, and consequential damages", after an advertisement for the chain was blocked from airing during Super Bowl LI. Despite repeated approvals by Fox, the network stated that the ad had been vetoed by the National Football League because of GNC's placement on an NFLPA blacklist for selling products that contain substances banned by the NFL. The letter of intent claimed that Fox had not informed them of any such rules when they purchased the ad time, and cited that the purchase induced them to "spend millions of dollars in production costs and in the development of a national, coordinated marketing and rebranding campaign" around the commercial. The NFL itself does not prohibit ads for health stores unless they contain references to specific prohibited products; the GNC ad only contained motivational themes and no references to its products.[17][18][19]

References

  1. ^ "US SEC: Form 10-K GNC Holdings Inc". U.S. Securities and Exchange Commission. Retrieved February 2, 2018.
  2. ^ "Kenneth A. Martindale: Executive Profile & Biography - Bloomberg". www.bloomberg.com. Retrieved 27 October 2017.
  3. ^ Daparma, Ron (April 17, 2003), "Robinson to retire as RIDC president", Pittsburgh Tribune-Review, Pittsburgh, PA
  4. ^ Kate Wu (February 13, 2018). "China's Harbin Pharma to buy stake in U.S. health retailer GNC". Reuters. Retrieved November 7, 2018.
  5. ^ Hays, Constance L. (2001-08-22). "Franchisees On Edge; Some Angry Ones Sue As GNC Competes". The New York Times. Retrieved 2014-02-11.
  6. ^ "Franchisees sue GNC in New Jersey - Pittsburgh Business Times". Bizjournals.com. 2003-04-30. Retrieved 2014-02-11.
  7. ^ "GNC franchisees file lawsuit - Pittsburgh Business Times". Bizjournals.com. 2004-10-20. Retrieved 2014-02-11.
  8. ^ "A.G. Schneiderman Asks Major Retailers To Halt Sales Of Certain Herbal Supplements As DNA Tests Fail To Detect Plant Materials Listed On Majority Of Products Tested". ag.ny.gov. 3 February 2015. Retrieved 2018-10-08.
  9. ^ O'Connor, Anahad (28 September 2016). "New York Attorney General Targets Supplements at Major Retailers". The New York Times. Retrieved 2018-10-08.
  10. ^ "GNC Stands Behind the Quality of Its Products and Agrees to Temporarily Remove a Small Number of Products While Working with New York State Attorney General's Office". GNC Holdings, Inc. 4 February 2015. Retrieved 2018-10-08.
  11. ^ "GNC Refutes New York State Attorney General's Claims in Full and Robust Response". GNC Holdings, Inc. 9 February 2015. Retrieved 2018-10-08.
  12. ^ "A.G. Schneiderman Announces Major Nationwide Agreement With NBTY, Herbal Supplement Maker for Walgreens And Walmart". ag.ny.gov. 28 September 2016. Retrieved 2018-10-08.
  13. ^ Parveen, Iffat; Gafner, Stefan; Techen, Natascha; Murch, Susan J.; Khan, Ikhlas A. (September 2016). "DNA Barcoding for the Identification of Botanicals in Herbal Medicine and Dietary Supplements: Strengths and Limitations". Planta Medica. 82 (14): 1225–1235. doi:10.1055/s-0042-111208. ISSN 1439-0221. PMID 27392246.
  14. ^ Aguillard, Anna (30 November 2015). "Oregon's crackdown on GNC part of nation-wide crackdown on dietary supplement industry". Legal News Line. Retrieved 1 December 2015.
  15. ^ Young, Alison (23 October 2015). "Oregon AG accuses retailer GNC of selling drug-spiked dietary supplements". USA Today. Retrieved 1 December 2015.
  16. ^ Germano, Sara; NG, Serena (22 October 2015). The Wall Street Journal https://www.wsj.com/articles/oregon-sues-gnc-alleging-supplements-contained-illegal-ingredients-1445543143. Retrieved 1 December 2015. Missing or empty |title= (help)
  17. ^ "GNC's Super Bowl ad controversy escalates". USA Today. Retrieved 3 February 2017.
  18. ^ Bruell, Alexandra (2017-01-31). "GNC's Super Bowl Ad Rejected by NFL". Wall Street Journal. Retrieved 1 February 2017.
  19. ^ "Watch the GNC ad the NFL rejected from Super Bowl". USA Today. Retrieved 1 February 2017.

External links

  • GNC | Official Website
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