GNC 2012 Annual Report Download - page 11

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Table of Contents
Year ended December 31,
2011 2010 2009
(dollars in millions)
Retail $ 1,518.5 73.3% $ 1,344.4 73.8% $ 1,256.3 73.6%
Franchise 334.8 16.1% 293.6 16.1% 264.2 15.5%
Manufacturing/Wholesale (Third Party) 218.9 10.6% 184.2 10.1% 186.5 10.9%
Total $ 2,072.2 100.0% $ 1,822.2 100.0% $ 1,707.0 100.0%
Although we believe that our retail and franchise businesses are not seasonal in nature, historically we have experienced, and expect to continue to
experience, a variation in our net sales and operating results from quarter to quarter.
Retail
Our Retail segment generates revenues primarily from sales of products to customers at our company-owned stores in the United States, Canada and
Puerto Rico and through our websites, GNC.com and LuckyVitamin.com.
Locations
As of December 31, 2011, we operated 3,046 company-owned stores across all 50 states and in the District of Columbia and in Canada and Puerto Rico.
Most of our 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.
Traditional shopping mall and strip shopping center locations generate a large percentage of our total retail sales. With the exception of our downtown stores,
virtually all of our company-owned stores follow one of two consistent formats, one for mall locations and one for strip shopping center locations.
We periodically redesign our store graphics to better identify with our GNC customers and provide product information to allow these customers to make
educated decisions regarding product purchases and usage. Our product labeling is consistent within our product lines and the stores are designed to present a
unified approach to packaging with emphasis on added information for the customer. As an ongoing practice, we continue to reset and upgrade all of our
company-owned stores to maintain a more modern and customer-friendly layout, while promoting our GNC Live Well® theme.
Websites
Our website, GNC.com, which we re-launched in 2009, has become an increasingly significant part of our business. Some of the products offered on our
website may not be available at our retail locations, enabling us to broaden the assortment of products available to our customers. The ability to purchase our
products through the internet also offers a convenient method for repeat customers to evaluate and purchase new and existing products. This additional sales
channel has enabled us to market and sell our products in regions where we have limited or no retail operations. Internet purchases are fulfilled and shipped
directly from our distribution centers to our consumers using a third-party courier service. To date, we believe that most of the sales generated by our website
are incremental to the revenues from our retail locations.
In August 2011, we acquired S&G Properties, LLC d/b/a LuckyVitamin.com and What's the Big Deal?, Inc. d/b/a Gary's "World of Wellness"
(collectively referred to as "LuckyVitamin.com"), an online retailer of health and wellness products.
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