North Bergen, NJ—A collaboration between two powerful supplement chains has been held up by the U.S. Federal Trade Commission (FTC). The Vitamin Shoppe, based here, announced in mid-December it planned to buy Super Supplements, Inc. of Seattle, WA for a cool $50 million in cash.

Super Supplements has 31 stores in the Pacific Northwest, a region where Vitamin Shoppe would like to expand beyond its current 17 locations in Washington. Oregon and Idaho. The existing Super Supplements stores are expected to generate $75 million in revenue next year.

Stated Jim Sweeney, CEO of Super Supplements, “We are all very proud of what we have built and accomplished since 1994 and we are very excited that the next chapter for Super Supplements will be as a part of the Vitamin Shoppe family.”

But, before the deal could close on as anticipated December 31, 2012, the FTC told Vitamin Shoppe that it is conducting an investigation into the acquisition. Since the FTC could not offer any indication of when the investigation will conclude, or what its findings could be, the closing date for the possible acquisition was moved to March 1, 2013. In an official statement, Vitamin Shoppe stated, “There can be no assurance as to whether and when the transaction will be consummated in light of these developments.”

The potential merger isn’t a surprise to Jay Jacobowitz, president and founder of Retail Insights, Brattleboro, VT, and merchandising editor for this publication. He says both chains have similar store models, with “straight-ahead exclusively supplements stores, multi-units with little individual store-level autonomy, and uniform buying and promotional programs.” Also, he says Vitamin Shoppe and Super Supplements typically engage with shoppers less than a higher-service independent store. “This intentionally low customer service level is mostly for liability reasons; keeping staff from inadvertently swerving into the practice of medicine and running afoul of myriad state and federal laws,” he states.

As for the reasons behind the merger, he speculates that Super Supplements may have accumulated too much debt or its investors “were just anxious for a payday, and took a reasonable offer from one of the few potential suitors out there.”

 

Published in WholeFoods Magazine, February 2013 (online 12/19/12, updated 1/7/12)