GNC 2009 Annual Report Download - page 11

Table of Contents
Products
We offer a wide range of high-quality nutritional supplements sold under our GNC proprietary brand names, including Mega Men, Ultra
Mega, Pro Performance, and Preventive Nutrition, and under nationally recognized third-party brand names. We report our sales in four major
nutritional supplement categories: VMHS; sports nutrition; diet; and other wellness. We offer an extensive mix of brands and products, including
approximately 2,700 SKUs across multiple categories. This variety is designed to provide our customers with a vast selection of products to fit
their specific needs. Sales of our proprietary brands at our company-owned stores represented approximately 51% of our net retail product
revenues for 2008, 48% for 2007, and 46% for 2006.
Consumers may purchase a GNC Gold Card in any U.S. GNC store or at www.gnc.com for $15.00. A Gold Card allows a consumer to save
20% on all store and on-line purchases on the day the card is purchased and during the first seven days of every month for a year. Gold Card
members also receive personalized mailings and e-mails with product news, nutritional information, and exclusive offers.
Products are delivered to our retail stores through our distribution centers located in Leetsdale, Pennsylvania; Anderson, South Carolina;
and Phoenix, Arizona. Our distribution centers support our company-owned stores as well as franchised stores and Rite Aid locations. Our
distribution fleet delivers our finished goods and third-party products through our distribution centers to our company-owned and domestic
franchised stores on a weekly or biweekly basis depending on the sales volume of the store. Each of our distribution centers has a quality
control department that monitors products received from our vendors to ensure quality standards.
Based on data collected from our point-of-sale systems, excluding certain required accounting adjustments of $4.7 million for 2008, $(0.6)
million for the period from January 1 to March 15, 2007, $5.0 million for the period from March 16 to December 31, 2007, and $0.1 million for
2006, below is a comparison of our company-owned domestic store retail product sales by major product category and the percentages of our
company-owned domestic store retail product sales for the periods shown:
Successor Combined Predecessor
Year ended December 31,
U.S Retail Product Categories: 2008 2007 2006
(dollars in millions)
VMHS Products $ 465.2 41.3% $ 441.2 40.7% $ 421.5 40.0%
Sports Nutrition Products 410.1 36.4% 387.0 35.7% 375.6 35.6%
Diet Products 148.2 13.2% 156.7 14.6% 161.7 15.3%
Other Wellness Products 102.0 9.1% 98.0 9.0% 96.1 9.1%
Total U.S. Retail revenues $ 1,125.5 100.0% $ 1,082.9 100.0% $ 1,054.9 100.0%
VMHS
We sell vitamins and minerals in single vitamin and multi-vitamin form and in different potency levels. Our vitamin and mineral products are
available in liquid, tablets, soft gelatin, and hard-shell capsules and powder forms, and are available in traditional bottle packaging form or in
customized daily packet form ("Vitapak"). Many of our special vitamin and mineral formulations, such as Mega Men and Ultra Mega, are
available only at GNC locations. In addition to our selection of VMHS products with unique formulations, we also offer the full range of standard
"alphabet" vitamins. We sell herbal supplements in various solid dosage and soft gelatin capsules, tea, and liquid forms. We have consolidated
our traditional herbal offerings under a single umbrella brand, Herbal Plus®. In addition to the Herbal Plus line, we offer a full line of whole food-
based supplements and top selling herb and natural remedy products. Our target customers for VMHS products are women over the age of 35.
We also offer a variety of specialty products in our GNC and Preventive Nutrition product lines. These products emphasize third-party
research and literature regarding the positive benefits from certain ingredients. These offerings include products designed to provide nutritional
support to specific areas of the body, such as joints, the heart and blood vessels, and the digestive system.
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