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GNC boosts e-commerce arm with LuckyVitamin.com acquisition

By Elaine Watson , 24-Aug-2011

Nutritional supplements giant GNC has boosted its presence in the fast-growing e-commerce channel with the acquisition of online discount supplement retailer LuckyVitamin.com for an undisclosed sum.

LuckyVitamin.com would give GNC access to a broader range of customers and products, and would in turn benefit from GNC’s expertise in manufacturing, distribution, purchasing and product development, said GNC.

However, GNC.com and LuckyVitamin.com will continue to be run as standalone businesses following the deal, while LuckyVitamin.com chief executive Sam Wolf will stay at its helm, but work within GNC’s broader e-commerce team, said the firm.

“Following the acquisition, GNC.com and LuckyVitamin.com will continue to operate as separate businesses, each with its own product offerings and target customers.”

LuckyVitamin, which is based in Norristown, Pennsylvania – about 300 miles east of GNC’s Pittsburgh HQ - turned over about $40m in the past year.

GNC does not break out e-commerce sales in its trading figures, but said online arm GNC.com posted a 42.8% rise in sales in the second quarter.

Deal will give GNC a stake in fast-growing discount e-commerce channel

GNC chief executive Joe Fortunato said the deal would “broaden our customer demographics and product offerings online”.

He added: “LuckyVitamin.com creates a perfect opportunity for GNC to leverage our existing capabilities, provides synergies to strengthen the competitive position of LuckyVitamin.com and gain market share in the fast-growing discount e-commerce channel.”

The acquisition would also enable GNC to appeal to a wider audience without compromising its Live Well brand or the more premium market positioning of GNC.com, said GNC chief marketing officer Jeffrey Hennion.

“The combination of GNC.com's premium branding, content and product assortment with LuckyVitamin.com's competitive offering, best-in-class functionality and customer service advances GNC's position in the e-commerce channel and leverages the strengths of both companies."

GNC, which has recently begun trading on the New York Stock Exchange, has more than 5,700 stores in the US and 1,700+ overseas selling a range of products under GNC proprietary brands including Mega Men, Ultra Mega, GNC Wellbeing, Pro Performance, and Longevity Factors, and third party brands.

The firm, which posted a 29% rise in adjusted profit to $87.6m in the three months to June 30 and a 13.7% rise in sales to $518.5m, also has a supplements manufacturing and wholesale arm.