Retail chains of all types have faced a hard road over the past few years.
From dollar discount outlets to luxury department stores, thousands of stores across the country have closed underperforming locations or shuttered entirely.
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The Covid-19 pandemic forced businesses to lock their doors for weeks or months, and once things started to open back up, it was too little, too late for some outlets.
While brick-and-mortar stores tried to stage their comebacks, shoppers were spending more time online.
There was one clear pandemic winner, however: e-commerce.
The nutritional supplement retail business is growing.
Image source: Shutterstock
Changing consumer behavior has taken a toll on retailers
Post-pandemic shoppers simply have not returned to stores with much enthusiasm. Initially, they didn’t like the social-distancing rules, but now it just seems like shoppers prefer the convenience of shopping from home.
The Vitamin Shoppe, with headquarters in Secaucus, New Jersey, has hung on and come up with creative offerings, even as it faces significant competition from larger retailers like Walmart and Target, and from the king of e-commerce, Amazon. There is also growing competition from direct-to-consumer supplement brands like Ritual and Athletic Greens.
In response, the company pursued an omnichannel strategy, investing in digital tools, subscription services, and loyalty programs to entice customers.
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The Vitamin Shoppe also just debuted a new concept in a handful of locations. Called Hometown, the store-within-a-store concept features locally owned wellness products. And The Vitamin Shoppe recently launched a telehealth service, matching customers with licensed medical providers who can write prescriptions for medications such as the in-demand weight-loss drugs Ozempic and Mounjaro.
The Vitamin Shoppe’s parent company made a difficult decision
When The Vitamin Shoppe’s parent company, The Franchise Group, filed for Chapter 11 bankruptcy protection in November 2024, it caught some in the industry by surprise. The bankruptcy filing “appears to be unrelated to the performance of the retailer of nutritional supplements,” according to Supply Side Supplement Journal.
The Franchise Group also owns Pet Supplies Plus, Badcock Home Furniture, Buddy’s Home Furnishings, and Sylvan Learning, but The Vitamin Shoppe is its most well-known brand.
According to court documents, the company listed around $2 billion in debt when it filed for protection. Next month, on May 12, the company has a hearing to seek approval of its reorganization plan.
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Well ahead of that hearing, The Franchise Group announced it will sell The Vitamin Shoppe to Kingswood Capital Management and Performance Investment Partners for $193.5 million.
This news is surprising, since The Vitamin Shoppe, which has 650 company-operated stores, announced expansion plans as recently as 2023, including signing new franchise partners. The company launched its franchise program in 2021 after 46 years in business.
In a statement, Kingswood Partner Michael Niegsch and Performance Investment Partners Mark Genender said they plan to “partner with The Vitamin Shoppe team and help them build upon the success the business has enjoyed over the last forty-eight years.”
It could be a profitable acquisition for investment firms, since this retail sector seems to be thriving. According to The Global Wellness Institute, the so-called global wellness economy reached $6.3 trillion in 2023 and could reach $9 trillion by 2028. The supplement business alone was valued at $481.2 billion in 2024.
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