TODAY'S PAPER
34° Good Morning
34° Good Morning
Business

Retail Roundup: Vitamin World making online push in China and on Amazon

Since filing for Chapter 11 bankruptcy protection in 2017, the Long Island-based health supplements retailer has closed about half of its stores and streamlined operations. 

Frank Conley, CEO of Vitamin World, seen in

Frank Conley, CEO of Vitamin World, seen in the company's Smith Haven Mall store on Nov. 14, says Vitamin World has turned a corner since being bought out of bankruptcy in January. Photo Credit: Debbie Egan-Chin

Vitamin World has turned a corner since being bought out of bankruptcy in January, the company’s CEO said.

Now under the ownership of a Chinese company, the health supplements retailer is smaller, operations are more streamlined, online sales are expanding, and it is pushing into the China market, CEO Frank Conley told me in a recent interview at Smith Haven Mall in Lake Grove, where Vitamin World has a store.

“It’s been very positive since cycling through the bankruptcy,” he said.

Since Vitamin World filed for Chapter 11 protection in September 2017, the company has slimmed down to about half as many stores — down to 154 — and 40 percent fewer employees, which now number 900, including 75 at its Great River headquarters.

The 41-year-old company relocated its headquarters from Holbrook to Great River in February. In December 2016 it sold its Holbrook office for $16.6 million and began renting the space.

“Our lease in Holbrook expired, and we took the opportunity to find office space better suited to our needs,” said Conley.

Vitamin World has gone through its fair share of changes over the past several years.

In February 2016 a previous owner, Ronkonkoma-based Nature’s Bounty Co., formerly known as NBTY, sold 90 percent of the chain to Manhattan private equity firm Centre Lane Partners LLC for about $25 million. The remaining 10 percent was owned by Vitamin World executives.

Beijing-based Feihe International bought Vitamin World out of bankruptcy for $28 million in January through an affiliate, Valuable Hero International, based in the British Virgin Islands. Feihe is the largest maker of baby formula in China.

In its 2017 Chapter 11 filing Vitamin World listed liabilities of more than $43.6 million and assets at $50 million to $100 million.

Conley declined to disclose the privately owned company’s financial results for the first three quarters of this year or whether it is operating profitably now.

Seventy percent of the company’s sales are of private-label products, made by contracted manufacturers in the United States.

Vitamin World, which was selling its 1,600 products only in its stores and on its website, started selling on JD.com, a Chinese retail website, this month. It plans to start selling on Amazon.com, the world’s largest online retailer, on Tuesday. 

“We looked at Amazon as another great e-commerce platform that we need to be on because of their customer base,” Conley said.

The Amazon platform will help Vitamin World appeal to customers who wouldn’t shop on the company’s website or in its stores, which are concentrated in New York, Florida, Texas, California, Puerto Rico and Guam, he said.

Issues with China’s safety standards, combined with Chinese consumers’ growing interest in health and wellness, have led  more Chinese companies  to buy or invest in foreign supplement companies.

On Nov. 7 Chinese drugmaker Harbin Pharmaceutical Group Holding Co. said it had invested $300 million in an approximately 40 percent stake in Pittsburgh-based GNC Holdings Inc., the largest specialty retailer of nutritional products.

Chinese consumers value “the good manufacturing processes that we have in the United States because of our quality standards,” Conley said.

The retail nutritional supplements industry has been growing modestly over the last five years in the United States, and specialty stores have been losing market share as foot traffic at malls declines, according to IBISWorld, a New York-based market research firm.

The problem for specialty chains like Vitamin World is that "people are buying differently or buying in different places," said Damian Witkowski, research analyst at Gabelli & Co., a Rye-based financial services company. "Where the market share has gone is to mass retailers, such as Walmart, Costco, your local grocery store. They’ve all done a better job of offering a bigger selection at good prices."

Retail Roundup is a column about major retail news on Long Island — store openings, closings, expansions, acquisitions, etc. — that is published online and in the Monday paper. To read more of these columns, click here. If you have news to share, please send an email to Newsday reporter Tory N. Parrish at tory.parrish@newsday.com.

More news