European GNCs Sold to NBTY, Letter of Intent Signed forUnicity

European GNCs Sold to NBTY, Letter of Intent Signed forUnicity

BOHEMIA, N.Y.--While NBTY Inc. was forthcoming about itsacquisition of the Europe-based GNC stores from parent company Royal Numico N.V.,both companies were tight-lipped over what this would mean for the future of the4,500 GNCs in North America. In addition, Royal Numico announced in its fiscal(FY02) report, released March 6, that a letter of intent was signed Feb. 28 forthe sale of Unicity, its direct-marketing dietary supplement division. Thecompany also said it "feels confident" Rexall Sundown will be soldbefore July 2003; a projected buyer of the supplement line was not named, thoughindustry speculation has focused on NBTY.

Effective March 10, NBTY's Holland & Barrett Group Ltd., based in theUnited Kingdom, acquired Health & Diet Group Ltd. and the FSC wholesalebusiness from Royal Numico. Health & Diet Group owns and operates 49 GNCstores in the United Kingdom and seven in Germany. The purchase price for thesebusinesses was approximately $12 million, plus the price of FSC inventory atcost. The production facility and warehouse in Kearsley, England, were alsoincluded in the sale.

The 2002 sales for the European GNCs came to approximately $57 million; thestores employ 550 people.

"These acquisitions are part of our strategic plan to enhance NBTY'swholesale operation and further our position as the dominant force in thenutritional supplement industry," said Scott Rudolph, chairman and chiefexecutive officer (CEO) at the company. "NBTY continues to make strategicacquisitions and remains at the forefront of the worldwide nutritionalsupplement industry consolidation."

Jan Bennink, CEO of Royal Numico, stated, "We are pleased to announcethe sale of Health & Diet Group as a strategic step forward in the processof divesting the European supplements activities, as announced in November2002."

In terms of the North American GNCs, Bennink said, "Notwithstanding thefirst positive signs we see from these various initiatives, we are not fullyconfident that GNC will return to acceptable sales growth and margin levelswithin 18 months. Therefore, we keep all possible options open for GNC."

For the year, sales at all GNCs declined 5.9 percent, while sales for RoyalNumico's Rexall Sundown line dropped 21.4 percent, and Unicity experienced asales loss of 19.4 percent.