Rexall Names Sales VP; GNC Remodeling Stores With Ephedra-Free Sections
This article was originally published in The Tan Sheet
Executive Summary
GNC's remodeling effort will involve dividing its store floors into different categories to make them easier to navigate, the company said
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GNC's remodeling effort will involve dividing its store floors into different categories to make them easier to navigate, the company said. Different sections will include areas for kids & teens; men's nutrition; women's nutrition, which will include prenatal supplements; and women's daily nutrition, which will encompass multivitamins as well as hair and nail supplements. A special section will be in place for ephedra-free products, which have seen significant growth due to ephedra's controversial nature. Companies that have added ephedra-free products to their lines include Twinlab, which now sells Metabolift MaHuang Free capsules, and Weider Nutrition International, which introduced its ephedra-free Schiff Green Tea Diet line in May 2001 (1 (Also see "Schiff Green Tea Supplement Weighs Into Diet Market" - Pink Sheet, 30 Apr, 2001.), p. 16). Other floor categories specifically will promote GNC products. The store will designate a section to Scan Diet bars and ready-to-drink shakes, which launched in January 2002. The move will continue a trend of focusing attention on Numico brands at GNC stores, which began when the Dutch conglomerate acquired the retail chain in July 1999. Since then, GNC has dedicated increasing shelf space to its own products, as well as products made by Rexall Sundown and Nutricia, other Numico subsidiaries. In March, Numico execs announced 45% of GNC's sales came from products made by those companies (2 (Also see "Royal Numico Brands To Dominate GNC Product Offerings" - Pink Sheet, 18 Mar, 2002.), p. 3). The retail chain's remodeled stores will feature new color schemes with "bright blues and yellows," while humorous quotes "about living a healthy and positive lifestyle" will adorn store walls, GNC said. "The new look of GNC is brighter and promotes a positive lifestyle," the company added. Among the quotes the supplement retailer will display are Jonathan Swift's "May you live every day of your life" and Abraham Lincoln's "Whatever you are, be a good one." Free informational brochures on different health topics also will be made available on spinner racks at the front of stores, GNC said. The remodeling is expected to begin in late summer, with completion targeted for the end of the year. The retail chain unveiled the changes in mid-May at its Franchise Convention in Las Vegas. The design of the new store layouts was determined after conducting numerous focus groups, GNC said. The remodeling is intended to increase foot traffic at the chain. In a recent financial report, Numico noted it was shifting its priorities for GNC away from store expansion to improved customer service and customer traffic (3 (Also see "GNC Enhanced Store Layout, Slower Expansion Planned By Numico" - Pink Sheet, 13 May, 2002.), p. 9). The new corporate strategy could help GNC rebound from its recent mediocre performance; domestic sales dropped 4.7% to $360 mil. in the first quarter of 2002. Company-owned stores saw sales decline 5.4%, while franchise store revenues fell 3.4%. Several store locations will complement their new layout with the introduction of smoothie bars. GNC plans to open 300 smoothie bars by the end of the year; more than 30 bars already have debuted. Besides changing the image of the GNC chain, Numico also has modified its ad strategy for the retailer. According to the firm, "GNC has decided to use ad agencies on a per project basis instead of on a retainer." The company recently hired New York-based Chiat/Day for its advertising programs, opting not to renew its contract with New York-based Deutsch. Chiat/Day's assignment could be to promote GNC's revamped image. Fellow Royal Numico subsidiary Rexall Sundown also is implementing changes. The company announced May 28 it had named Lawrence Woods, 47, the firm's new VP-sales. Woods, who took over the same day, most recently served as VP-Global Sales for the Sunbeam Corporation. Woods' appointment gives Rexall's senior management another executive with experience in the conventional foods market. He was VP-sales & marketing for the Northern Division of Frito-Lay and was affiliated with the Pepsi-Cola Company for roughly ten years. Woods also served as VP-sales & trade marketing for Benckiser Consumer Products from 1993 to 1999. Ralph Denisco, Rexall's recently appointed CEO, previously headed the industrial baking business Norse, which was formerly owned by Nestle (4 (Also see "Rexall CEO Denisco Leaving Senior Management Structure Intact" - Pink Sheet, 24 Dec, 2001.), p. 13). |