Store Strives to Offer One-Stop Vitamin Shopping ; CEO Deems Information As Important As Supplements

Tom Tolworthy says the muscle his company needs to build will ultimately come from the information it provides to customers.

As CEO of The Vitamin Shoppe, he wants to help everyone from the body builder to the casual dieter to make sure they’re not overwhelmed by the selection of more than 400 brands of vitamin supplements.

So he puts a premium on staff training. And he makes sure each of the company’s 245 stand-alone stores has a kiosk where customers can access and print independent information on the supplements, which are not regulated by the Food and Drug Administration

The information is provided by a company called Health Notes and includes potential prescription drug interactions and other research on the supplements.

“It’s clinically based information, and it’s not always positive,” Tolworthy said. “But we want to be able to offer the best credible information that exists in the marketplace because there can be conflicting information from time to time in the media. The philosophy of the company really is in education and information.”

Thanks in part to the capital of the private equity group at Bear, Stearns & Co., which purchased The Vitamin Shoppe in 2002, the North Bergen retailer has been expanding, with 61 new stores in 2004 and plans to open another 60 this year.

The Bear, Stearns purchase has spurred talk of taking The Vitamin Shoppe public, since the equity group already has had a successful IPO with women’s apparel retailer New York & Co., and has filed to take another acquisition, Reddy Ice, which sells ice and leases ice machines.

“Without confirming or denying anything, I can say the current intent of the ownership of The Vitamin Shoppe, in order to realize the return on their investment, would be to do a public offering, as opposed to a private sale,” Tolworthy said. “It would be safe to say the timing would be within the next couple of years.”

The Vitamin Shoppe is competing in a robust industry. In 2003, the latest year for which data are available, the U.S. nutrition industry was valued at $62.9 billion by the National Nutritional Foods Association.

“The industry itself has seen astronomical growth,” said C. Britt Beemer, chairman of America’s Research Group, which monitors shopping trends. “And with the boomers getting older and trying to find their lost youth, they’re going to be much more aggressive in buying these products.”

Even so, Beemer said, a premium on customer relations is a must for The Vitamin Shoppe to compete successfully against General Nutrition Corp., Vitamin World, Whole Foods, and increasingly, stores such as Wegmans and retail giant Wal-Mart.

“The Internet has also been competitive in this area in the past few years, and with discounters like Wal-Mart expanding vitamin shelves in their stores, a good relationship with your customers is going to be the key to the whole picture,” Beemer said.

Tolworthy noted that Vitamin Shoppe customers enjoy incentive programs designed to keep them coming back.

“Our frequent buyer program allows customers to sign up for free and get a credit at the end of the year for free merchandise or a discount,” Tolworthy said.

The company also has a catalog and is back in the Internet sales game. It spun off VitaminShoppe.com in 1999 but bought it back two years later.

The company was founded in 1977 by entrepreneur Jeff Horowitz with an initial store that still is in business on 57th Street and Lexington Avenue in Manhattan. It was later acquired by venture capital group FdG Associates, which subsequently sold to Bear Stearns Merchant Banking. Tolworthy said revenues of late have been “in excess of $400 million annually.”

The Vitamin Shoppe continues to expand as data suggest lots of folks want nutritional supplements. The National Nutritional Foods Association, for example, found that 76 percent of Americans take some vitamin or supplement daily, and that more than 90 percent self- medicate.

Today, The Vitamin Shoppe has 15 stores in New Jersey.

Tolworthy, who came to The Vitamin Shoppe four years ago after being president of Barnes & Noble, said his career is firmly rooted in the notion that knowledge is power. And he noted that efforts to educate his sales force and customers will expand.

“We’re launching a new Web-based training program for employees by September,” Tolworthy said. “We want people to think of Vitamin Shoppe as America’s health superstore, where your questions can be answered and quality products can be obtained at competitive prices.”

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E-mail: mcaleavy@northjersey.com