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GNC looks inside for new CEO
Saturday, November 12, 2005

Less than six months after bringing in a retail executive from outside to turn the company around, Pittsburgh vitamin retailer GNC Corp. announced yesterday it was handing the job to a longtime company executive.

  
Joe Fortunato
Joseph Fortunato, who started with the operator of the 5,000-store General Nutrition Center chain in 1990, is taking over as president and chief executive officer.

The 15-year GNC veteran replaces Bruce E. Barkus, a former executive with Family Dollar Store and Eckerd who joined the company in June. In an official statement, GNC said yesterday Mr. Barkus had stepped down to pursue other interests.

The change ushers the fourth person into the CEO office in the past year and reflects the difficult times that both GNC and the vitamin industry have been slogging through.

Sales have been uneven in the face of questions about the safety of some supplements, the fading of the low-carb diet craze and competition from mass market retailers.

Last year, the private equity investors who control GNC canceled a plan to take the company public in the face of slipping sales. Louis Mancini, a longtime company executive, left the CEO's post in December and the position was filled on an interim basis by Robert DiNicola, a former Zales executive who now serves as the company's chairman.

Mr. Fortunato, who was promoted to senior executive vice president and chief operating officer in June, is expected to be a long-term inhabitant of the office. "We see this as bringing stability to the company's management going forward," said company spokesman Benjamin Pratt.

The fact that the company has apparently given up on outside talent and gone back to an internal choice struck at least one analyst as odd. "I've just got to think this would reflect disarray at GNC and in the vitamin industry," said Gary Giblen, at Brean Murray & Co. in New York.

Just last week, the retailer released third-quarter results that, while not great, appeared to reflect improvement. Sales in stores open at least a year showed growth, something that had not happened for several quarters. "It looked like they were making gradual progress," said Mr. Giblen.

At the beginning of the year, GNC laid out a strategic plan that included maintaining every day low prices on key competitive items, improving relations with vendors to encourage getting new items into the stores and stepping up marketing initiatives.

"GNC's management team will continue its focus on the business strategies implemented at the beginning of 2005," said Mr. Fortunato yesterday in a prepared statement. "These business strategies are already starting to show positive results and have strengthened GNC's leadership position in the industry."

First published on November 12, 2005 at 12:00 am
Teresa F. Lindeman can be reached at tlindeman@post-gazette.com or at 412-263-2018.