GNC, Ephedra Substitutes Show Some Promise

GNC, Ephedra Substitutes Show Some Promise

ZOETERMEER, The NetherlandsFor the first quarter (1Q03), RoyalNumico reported GNC showed some signs of life while decreases in ephedra saleswere offset by impressive sales of ephedra substitute products.

GNC net sales declined 6.8 percent, with comparable store sales decreasing6.5 percent. On a more positive note, on a monthly basis, GNC achievedunderlying growth of 3.7 percent in March. We attribute these positive salesindicators to the remodeling of our stores, which finished in November,Numico stated.

Ephedra-related sales fell 59 percent compared to 1Q02, although taking intoaccount sales from ephedra substitutes, the decrease was only 32 percent. Thispositive pick-up was partly attributed to the companys successful launch ofTotal Lean in early 2003, which has already achieved a 21-percent market sharein GNCs ephedra-replacement product line-up. The company still planned for astop-sale of all ephedra inventory by the end of June, which would cost thecompany 4.4 million euros.