GNC names another CEO
The revolving door in the executive suite at GNC Corp. swung again on Friday, as the nutritional supplement retailer announced its fourth chief executive in less than a year.
Joseph Fortunato, a 15-year General Nutrition veteran, is the new CEO, moving up from his most recent job as executive vice president and chief operating officer. He replaces Bruce E. Barkus as CEO and president. Barkus resigned after five months on the job to "pursue other interests."
"I'm very excited about the opportunity to serve as GNC's CEO," Fortunato said, in a statement. "GNC's management team will continue its focus on the business strategies implemented at the beginning of 2005. These business strategies already are starting to show positive results."
The new GNC strategy to enable it to move forward after a tumultuous two years includes competitively pricing and heavily promoting its products while controlling overall expenses.
In December 2003, the Dutch company Royal Numico NV sold GNC to New York-based leveraged buyout firm Apollo Management LP, making the Pittsburgh-based retailer a stand-alone company again.
"Our same-store (comparable sales) are up, and we really are driving hard to get our same-store sales higher," said GNC spokesman Benjamin Pratt. During the three-month period ending Sept. 30, same-store sales in company-owned domestic shops rose 1 percent.
GNC operates 2,633 company-owned General Nutrition Center stores in the U.S. and Canada, and has 1,212 U.S. franchise locations, 1,114 stores in Rite Aid locations, and 822 international franchise stores.
However, ratings agency analysts who follow GNC were not as taken with the uptick in comparable sales, or the ongoing revenue and net income declines on a year-over-year comparison recorded through the first nine months of 2005.
Earlier this week, Standard and Poor's Kristi Broderick wrote she had revised GNC's outlook to negative from stable, a move based on "the company's less-than-anticipated progress from its rebuilding efforts and lower margins, along with its weak franchise operations and deteriorating credit metrics."
Fortunato will be counted on to bring stability to the executive suite, something GNC has been lacking for many months.
Two years ago when Royal Numico NV sold GNC, Louis Mancini was brought in by the new owners as CEO. He originally joined GNC in 1977, and had remained with the organization except for a brief period after GNC was acquired by Royal Numico in 1999.
Mancini resigned in December 2004, citing "personal reasons," and was replaced by Robert J. DiNicola, who only had joined GNC one month earlier. He currently is the company's executive chairman.
This past May, Barkus came to General Nutrition armed with 25 years of retail experience, just prior to joining the company as executive vice president of store operations at Family Dollar Stores Inc.