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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on March 21, 2011.

Registration Statement No. 333-169618

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



AMENDMENT NO. 7
TO
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



GNC Acquisition Holdings Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  5400
(Primary Standard Industrial
Classification Code Number)
  20-8536244
(I.R.S. Employer
Identification Number)

300 Sixth Avenue
Pittsburgh, Pennsylvania 15222
(412) 288-4600
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Gerald J. Stubenhofer, Jr.
Senior Vice President, Chief Legal Officer and Secretary
GNC Acquisition Holdings Inc.
300 Sixth Avenue
Pittsburgh, Pennsylvania 15222
(412) 288-4600
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies of all communications to:

Philippa M. Bond, Esq.
Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, California 90067
(310) 557-2900/(310) 557-2193 (Facsimile)

 

Robert E. Buckholz, Jr., Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
(212) 558-4000/(212) 558-3588 (Facsimile)



            Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.



            If the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

            If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o



CALCULATION OF REGISTRATION FEE

               
 
Title of Securities
to be Registered

  Amount to
be Registered(1)

  Proposed Maximum
Aggregate
Offering Price
Per Share

  Proposed Maximum
Offering
Price(1)(2)

  Amount of
Registration Fee(3)

 

Class A common stock, $0.001 par value per share

  25,875,000   $17.00   $439,875,000   $10,435

 

(1)
Includes 3,375,000 shares of Class A common stock that the underwriters have the option to purchase.

(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) of the Securities Act of 1933, as amended.

(3)
Previously paid $24,955 prior to the registrant's initial filing on September 28, 2010.

            The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated March 21, 2011

PROSPECTUS

22,500,000 Shares

GNC Holdings, Inc.

Class A Common Stock

          This is an initial public offering of Class A common stock of GNC Holdings, Inc. (formerly GNC Acquisition Holdings Inc.).

          We are selling 16,000,000 shares and 6,500,000 shares are being sold by certain of our stockholders, some of whom are our affiliates. We will not receive any proceeds from the sale of our Class A common stock by the selling stockholders.

          No public market currently exists for our Class A common stock. We have applied to list our Class A common stock on the New York Stock Exchange under the symbol "GNC". We anticipate that the initial public offering price of our Class A common stock will be between $15.00 and $17.00 per share.

          Investing in our Class A common stock involves risk. See "Risk Factors" beginning on page 16 of this prospectus.

 
Per Share
 
Total
 

Public offering price

  $   $  

Underwriting discount and commissions

  $   $  

Proceeds, before expenses, to GNC Holdings, Inc. 

  $   $  

Proceeds, before expenses, to the selling stockholders

  $   $  

          The selling stockholders have granted the underwriters a 30-day option to purchase up to 3,375,000 additional shares of Class A common stock at the public offering price, less the underwriting discount. We will not receive any proceeds from the exercise of the option to purchase additional shares.

          Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

          Delivery of the shares of Class A common stock will be made on or about                          , 2011.

Goldman, Sachs & Co.   J.P. Morgan
Deutsche Bank Securities   Morgan Stanley



Barclays Capital
William Blair & Company
          Credit Suisse
BMO Capital Markets

The date of this prospectus is                          , 2011.


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GRAPHIC


Table of Contents


TABLE OF CONTENTS

 
 
Page

Prospectus Summary

  1

Risk Factors

  16

Special Note Regarding Forward-Looking Statements

  37

Use of Proceeds

  39

Dividend Policy

  39

Capitalization

  41

Dilution

  43

Unaudited Pro Forma Consolidated Financial Data

  45

Selected Consolidated Financial Data

  51

Management's Discussion and Analysis of Financial Condition and Results of Operations

  54

Business

  76

Management

  106

Executive Compensation

  115

Principal and Selling Stockholders

  146

Certain Relationships and Related Transactions

  151

Description of Capital Stock

  156

Description of Certain Debt

  162

Shares Eligible for Future Sale

  164

Material United States Federal Tax Consequences to Non-United States Stockholders

  166

Underwriting

  169

Legal Matters

  175

Experts

  175

Where You Can Find More Information

  176

Index to Consolidated Financial Statements

  F-1



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PROSPECTUS SUMMARY

          This summary highlights the information contained in this prospectus. Because this is only a summary, it does not contain all of the information that may be important to you. For a more complete understanding of the information that you may consider important in making your investment decision, we encourage you to read this entire prospectus. Before making an investment decision, you should carefully consider the information under the heading "Risk Factors" and our consolidated financial statements and their notes in this prospectus. Prior to the consummation of this offering, GNC Acquisition Holdings Inc. will be renamed GNC Holdings, Inc. ("Holdings"). Unless the context requires otherwise, "we", "us", "our", and "GNC" refer to Holdings and its subsidiaries and, for periods prior to March 16, 2007, our predecessor. See "Business — Corporate History". References to "our stores" refer to our company-owned stores and our franchise stores. References to "our locations" refer to our stores and our "store-within-a-store" locations at Rite Aid.

Our Company

          Based on our worldwide network of more than 7,200 locations and our GNC.com website, we believe we are the leading global specialty retailer of health and wellness products, including vitamins, minerals and herbal supplements ("VMHS") products, sports nutrition products and diet products. Our diversified, multi-channel business model derives revenue from product sales through domestic company-owned retail stores, domestic and international franchise activities, third-party contract manufacturing, e-commerce and corporate partnerships. We believe that the strength of our GNC brand, which is distinctively associated with health and wellness, combined with our stores and website, give us broad access to consumers and uniquely position us to benefit from the favorable trends driving growth in the nutritional supplements industry and the broader health and wellness sector. Our broad and deep product mix, which is focused on high-margin, premium, value-added nutritional products, is sold under our GNC proprietary brands, including Mega Men®, Ultra Mega®, GNC WELLbeING®, Pro Performance®, Pro Performance® AMP and Longevity Factors™, and under nationally recognized third-party brands.

          Based on the information we compiled from the public securities filings of our primary competitors, our network of domestic retail locations is approximately twelve times larger than the next largest U.S. specialty retailer of nutritional supplements and provides a leading platform for our vendors to distribute their products to their target consumer. Our close relationship with our vendor partners has enabled us to negotiate first-to-market opportunities. In addition, our in-house product development capabilities enable us to offer our customers proprietary merchandise that can only be purchased through our locations or on our website. Since the nutritional supplement consumer often requires knowledgeable customer service, we also differentiate ourselves from mass and drug retailers with our well-trained sales associates who are aided by in-store technology. We believe that our expansive retail network, differentiated merchandise offering and quality customer service result in a unique shopping experience that is distinct from our competitors.

Recent Transformation of GNC

          Beginning in 2006, we executed a series of strategic initiatives to enhance our existing business and growth profile. Specifically, we:

    Assembled a world-class management team.    We made key senior management upgrades with talented and seasoned executives who have significant retail, international and consumer packaged-goods expertise to complement the existing leadership of GNC and to establish a foundation for growth and innovation.

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    Adopted a comprehensive approach to brand building and the retail experience.    We have modernized GNC's brand image, product packaging and media campaigns, and enhanced the in-store shopping experience for our customers.

    Increased focus on proprietary product development and innovation to drive growth in retail sales.    We have increased revenue contribution from new product lines through a series of successful GNC-branded product launches (Vitapak®, Pro Performance® AMP and GNC WELLbeING®), as well as recent launches of preferred third-party product offerings.

    Restaged e-commerce business.    We executed an overall site redesign in September 2009 in an effort to increase traffic and conversion rates, while enhancing overall functionality of the site. We believe this redesign has positioned GNC.com to continue capturing market share within one of the fastest growing channels of distribution in the U.S. nutritional supplements industry.

    Invested capital to support future growth.    During 2008 and 2009, we upgraded our point-of-sale systems to improve retail business processes, customer data collection and associate training, and to enhance the customer experience. In 2008, we also invested in our Greenville, South Carolina manufacturing facility to add capacity with respect to our soft gelatin capsule production and vitamin production and enhanced our packaging capabilities.

    Launched partnership programs designed to leverage GNC's brand strength.    In 2010, we partnered with PepsiCo to support its launch of Gatorade G Series Pro and to develop a new brand of fortified coconut water called Phenom, which we expect to be available to consumers in 2011, and with PetSmart to launch an exclusive line of GNC-branded pet supplements.

Industry Overview

          We operate within the large and growing U.S. nutritional supplements industry. According to Nutrition Business Journal's Supplement Business Report 2010, our industry generated $26.9 billion in sales in 2009 and an estimated $28.7 billion in 2010, and is projected to grow at an average annual rate of approximately 5.3% through 2015. Our industry is highly fragmented, and we believe this fragmentation provides large operators, like us, the ability to compete more effectively due to scale advantages.

          We expect several key demographic, healthcare and lifestyle trends to drive the continued growth of our industry. These trends include:

    increasing awareness of nutritional supplements across major age and lifestyle segments of the U.S. population; and

    increased focus on fitness and healthy living.

Competitive Strengths

          We believe we are well-positioned to capitalize on favorable industry trends as a result of the following competitive strengths:

    Highly-valued and iconic brand.    According to a Beanstalk Marketing and LJS & Associates research study commissioned by us, we hold an 87% brand awareness rate with consumers, which we believe is significantly higher than our direct competitors. We believe our recently modernized brand image, communicated through enhanced advertising campaigns, in-store signage and product packaging, reinforces GNC's credibility as a leader in the industry. Our large customer base includes approximately 4.9 million active Gold Card

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      members in the United States and Canada who account for over 50% of company-owned retail sales.

    Commanding market position in an attractive and growing industry.    With a global footprint of more than 7,200 locations in the United States and 46 international countries (including distribution centers where retail sales are made), and on GNC.com, we believe we are the leading global specialty retailer of health and wellness products.

    Unique product offerings and robust innovation capabilities.    Product innovation is critical to our growth, brand image superiority and competitive advantage. We have internal product development teams located in our corporate headquarters in Pittsburgh, Pennsylvania and our manufacturing facility in Greenville, South Carolina, which collaborate on the development and formulation of proprietary nutritional supplements with a focus on high growth categories. In 2010, we believe GNC-branded products generated more than $850 million of retail sales across company-owned and domestic franchise stores, GNC.com and Rite Aid store-within-a-store locations. In addition, our strong vendor relationships and large retail footprint ensure our stores frequently benefit from preferred distribution rights on certain new third-party products.

    Diversified business model.    Our multi-channel approach is unlike many other specialty retailers as we derive revenues across a number of distribution channels, including retail sales from company-owned retail stores, retail sales from GNC.com, royalties, wholesale sales and fees from both domestic and international franchisees, revenue from third-party contract manufacturing and wholesale revenue and fees from our Rite Aid store-within-a-store locations. Our business is further diversified by our broad merchandise assortment.

    Vertically integrated operations that underpin our business strategy.    To support our company-owned and franchise global store base, we have developed sophisticated manufacturing, warehousing and distribution facilities. Our vertically integrated business model allows us to control the production and timing of new product introductions, control costs, maintain high standards of product quality, monitor delivery times, manage inventory levels and enhance profitability. In addition, combined with our broad retail footprint, this model enables us to respond quickly to changes in consumer preferences and maintain a high pace of product innovation.

    Differentiated service model that fosters a "selling" culture and an exceptional customer experience.    We believe we distinguish ourselves from mass and drug retailers with our well-trained sales associates, who offer educated service and trusted advice. We believe that our expansive retail network, differentiated merchandise offering and quality customer service result in a unique shopping experience.

    World-class management team with a proven track record.    Our highly experienced and talented management team has a unique combination of leadership and experience across the retail and consumer packaged-goods industries.

          As a result of our competitive strengths, we have maintained consistent earnings growth through the recent economic cycle. The fourth quarter of 2010 marked the 22nd consecutive quarter of positive domestic company-owned same store sales growth. This consistent growth in company-owned retail sales, the positive operating leverage generated by our retail operations, cost containment initiatives, as well as growth in our other channels of distribution, have allowed us to expand our EBITDA margin by 560 basis points since 2005.

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Our Growth Strategy

          We plan to execute several strategies in the future to promote growth in revenue and operating income, and capture market share, including:

    Growing company-owned domestic retail earnings.    We believe growth in our domestic retail business will be supported by continued same store sales growth and positive operating leverage. The fourth quarter of 2010 marked our 22nd consecutive quarter of positive domestic company-owned same store sales growth. We believe our continued positive same store sales growth will be supported by the forecasted industry growth, our brand building initiatives, future proprietary product introductions and potential improvements in mall traffic trends. Our existing store base and the supporting infrastructure provide us the ability to convert a high percentage of our incremental sales volume into operating income, providing the opportunity to further expand our company-owned retail operating income margin.

    Growing domestic company-owned retail square footage.    For 2011, we expect to grow domestic company-owned retail square footage by approximately 3% to 4%. Based upon our operating experience and research commissioned by us and conducted by The Buxton Company, a customer analytics research firm, we believe that (i) the expansion of our store base and roll out of new store formats will allow us to increase our market share as we enter new markets and grow within existing markets to increase our appeal to a wider range of consumers, and (ii) the U.S. market can support a significant number of additional GNC stores, with at least 4,500 total potential domestic company-owned and franchise stores (excluding Rite Aid store-within-a-store locations).

    Growing our international footprint.    Our international business has been a key driver of growth in recent years. We expect to continue capitalizing on international revenue growth opportunities through additions of franchise stores, direct investment in high growth markets and expansion of product distribution in both existing and new markets. For example, we believe China's nutritional supplements market represents a significant growth opportunity, and in 2010, one of our subsidiaries commenced the process of registering products and initiating wholesale sales and distribution in China.

    Expanding our e-commerce business.    We believe GNC.com is positioned to continue capturing market share online, which represents one of the fastest growing channels of distribution in the U.S. nutritional supplements industry.

    Further leveraging of the GNC brand.    As with our Rite Aid partnership, we believe we have the opportunity to create incremental streams of revenue and grow our customer base by leveraging the GNC brand outside of our existing distribution channels through corporate partnerships. We expect these partnerships to include relationships with well-known national specialty retailers and club stores in addition to partnerships with leading consumer brand companies to sell our proprietary products.

The Sponsors

          Currently, Ares Corporate Opportunities Fund II, L.P. ("Ares"), Ontario Teachers' Pension Plan Board ("OTPP") and members of management hold substantially all of our outstanding common stock. Ares and OTPP are collectively referred to in this prospectus as the "Sponsors". After giving effect to this offering, the Sponsors will collectively hold 54,767,565 shares of our Class A common stock, representing approximately 63% of our outstanding Class A common stock, and OTPP will hold 16,103,245 shares of our Class B common stock, representing 100% of our outstanding Class B common stock, and the Sponsors will have the power to control our affairs and policies,

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including with respect to the election of directors (and through the election of directors the appointment of management), the entering into of mergers, sales of substantially all of our assets and other significant transactions. The Class A common stock and Class B common stock vote together as a single class on all matters and are substantially identical in all respects, including with respect to voting, dividends and conversion, except that the Class B common stock does not entitle its holder to vote for the election or removal of directors. In addition, a holder of Class B common stock may, at any time, elect to convert shares of Class B common stock into an equal number of shares of Class A common stock or, under certain circumstances, convert shares of Class A common stock into an equal number of shares of Class B common stock.

          All of our current directors were designated by the Sponsors and elected pursuant to the existing amended and restated stockholders agreement, which requires each of Ares and OTPP to vote all the shares of Class A common stock held by them in favor of the directors designated by each of them. Under a new stockholders agreement to be entered into among the Sponsors and us (the "New Stockholders Agreement"), effective upon completion of this offering, the Sponsors will have the right to nominate to our board of directors, subject to their election by our stockholders, for so long as the Sponsors collectively own more than 50% of the then outstanding shares of our common stock, the greater of up to nine directors and the number of directors comprising a majority of our board and, subject to certain exceptions, for so long as the Sponsors collectively own 50% or less of the then outstanding shares of our common stock, that number of directors (rounded up to the nearest whole number or, if such rounding would cause the Sponsors to have the right to elect a majority of our board of directors, rounded to the nearest whole number) that is the same percentage of the total number of directors comprising our board as the collective percentage of common stock owned by the Sponsors. Under the New Stockholders Agreement, each Sponsor will also agree to vote in favor of the other Sponsor's nominees. Because our board of directors will be divided into three staggered classes, the Sponsors may be able to influence or control our affairs and policies even after they cease to collectively own a majority of our then outstanding common stock during the period in which the Sponsors' designated directors finish their terms as members of our board. The New Stockholders Agreement will also provide that, so long as the Sponsors collectively own more than one-third of our outstanding common stock, certain significant corporate actions will require the approval of at least one of the Sponsors. See "Certain Relationships and Related Transactions — Stockholders Agreements".

          Pursuant to the ACOF Management Services Agreement described under the heading "Certain Relationships and Related Transactions — ACOF Management Services Agreement", upon consummation of this offering, we intend to terminate the agreement by paying ACOF Operating Manager II, L.P. (an affiliate of Ares) a fee equal to the net present value of the aggregate annual management fee that would have been payable to ACOF Operating Manager II during the remainder of the term of the fee agreement. Pursuant to the obligations under our Class B common stock, as described under the heading "Certain Relationships and Related Transactions — Special Dividend", OTPP will receive, in lieu of quarterly special dividend payments that would have been payable during the remainder of the Special Dividend Period (as defined below), an automatic payment in the amount equal to the net present value of the aggregate annual special dividend amount that would have been payable to OTPP. We expect that our aggregate payment to each of ACOF Operating Manager II and OTPP in connection with the termination of the ACOF Management Services Agreement and the special dividend payments, respectively, will be approximately $5.6 million.

          In connection with the consummation of this offering, OTPP will convert 12,065,316 shares of Class B common stock into an equal number of shares of Class A common stock. As a result of such conversion and after giving effect to this offering, OTPP will hold 23,610,082 shares of our Class A common stock representing approximately 27% of our outstanding Class A common stock

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and will hold 16,103,245 shares of our Class B common stock representing 100% of our outstanding Class B common stock.

          Together with our wholly owned subsidiary, GNC Acquisition Inc., we entered into an Agreement and Plan of Merger (the "Merger Agreement") with GNC Parent Corporation on February 8, 2007. Pursuant to the Merger Agreement and on March 16, 2007, GNC Acquisition Inc. was merged with and into GNC Parent Corporation, with GNC Parent Corporation as the surviving corporation and our wholly owned subsidiary (the "Merger"). In connection with the Merger, the Sponsors made equity contributions in GNC Parent Corporation in exchange for all of their shares of our common stock that they currently own.

Payments in Connection with This Offering

          The table below sets forth information concerning the payments that we expect to make to the Sponsors and our directors, director nominees and executive officers in connection with this offering.

 
 
Payments in
connection with
redemption of
Series A
preferred stock(1)
 
Payments in connection
with the ACOF
Management Services
Agreement and the
Special Dividend
 
Proceeds from
the sale of
Class A
common stock(2)
 
 
  (in thousands)
 

Directors and Executive Officers:

                   

Norman Axelrod(3)

  $ 227.7   $   $ 407.8  

David P. Berg

    35.4         84.3  

Jeffrey P. Berger*

             

Andrew Claerhout

             

Thomas Dowd

    131.7         419.4  

Joseph Fortunato

    632.6         2,963.8  

Jeffrey Hennion

             

Michael Hines

             

Beth J. Kaplan

            1,308.7  

David B. Kaplan

             

Brian Klos

             

Johann O. Koss*

             

Romeo Leemrijse

             

Michael Locke

    105.5         275.7  

Michael M. Nuzzo

             

Guru Ramanathan

    63.5         129.6  

Gerald J. Stubenhofer

            80.1  

Richard J. Wallace

             

Sponsors:

                   

Ares

    85,377.8     5,556     35,831.5  

OTPP

    108,822.5     5,556     45,670.9  

*
Director nominee

(1)
The accrued and unpaid dividends per share of our Series A preferred stock will be $2.45, assuming this offering is consummated on March 31, 2011.

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(2)
The proceeds from the sale of Class A common stock are based on the midpoint of the price range set forth on the front cover of this prospectus, less the underwriting discount, and do not take into account amounts paid in connection with the exercise of stock options or the sale of up to 3,375,000 shares of our Class A common stock that the underwriters have the option to purchase from the selling stockholders.

(3)
Includes amounts that will be paid to AS Skip LLC of which Mr. Axelrod is the managing member.

Risks Related to Our Business and Strategy

          Despite the competitive strengths described above, our ability to successfully operate our business is subject to numerous risks, including those that are generally associated with operating in the nutritional supplements industry. Any of the factors set forth under "Risk Factors" may limit our ability to successfully execute our business strategy. You should carefully consider all of the information set forth in this prospectus and, in particular, you should evaluate the specific factors set forth under "Risk Factors" in deciding whether to invest in our Class A common stock. Risks relating to our business and our ability to execute our business strategy include:

    we may not effectively manage our growth;

    we operate in a highly competitive industry and our failure to compete effectively could adversely affect our market share, revenues and growth prospects;

    unfavorable publicity or consumer perception of our products could adversely affect our reputation and the demand for our products;

    if the products we sell do not comply with applicable regulatory and legislative requirements, we may be required to recall or remove these products from the market;

    if we do not introduce new products or make enhancements to meet the changing needs of our customers in a timely manner, some of our products could become obsolete;

    our substantial debt could place us at a competitive disadvantage compared to our competitors that have less debt or that have greater capacity to service or refinance their debt;

    we may not anticipate all of the challenges imposed by the expansion of our operations and, as a result, may not meet our targets for opening new stores, remodeling or relocating stores or expanding profitably; and

    changes in our management team could adversely affect our business strategy and adversely impact our performance.

Recent Developments

          On March 4, 2011, our indirect operating subsidiary, General Nutrition Centers, Inc. ("Centers") entered into a $1.2 billion term loan facility with a term of seven years (the "Term Loan Facility") and an $80.0 million revolving credit facility with a term of five years (the "Revolving Credit Facility" and, together with the Term Loan Facility, the "Senior Credit Facility"). Centers used a portion of the proceeds from the Term Loan Facility to refinance its former indebtedness, including all outstanding indebtedness under the Old Senior Credit Facility, the Senior Notes and the Senior Subordinated Notes (each as defined in this prospectus), and to pay related fees and expenses. Centers used the remaining proceeds, together with cash on hand, to pay a dividend to Holdings of $185 million and contribute $85 million to its wholly owned subsidiary, GNC Funding, Inc. ("GNC Funding"), which amount GNC Funding then loaned to Holdings. In connection with the foregoing,

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Centers terminated all swap arrangements related to its prior indebtedness at an aggregate cost of $8.7 million. As of the date hereof, the Revolving Credit Facility remains undrawn, and we expect that the Revolving Credit Facility will remain undrawn as of the date this offering is consummated. We refer to these transactions and the use of proceeds therefrom collectively as the "Refinancing". For information about our use of the proceeds from the Refinancing and this offering please refer to "Use of Proceeds".

Corporate Information

          We are a Delaware corporation. Our principal executive office is located at 300 Sixth Avenue, Pittsburgh, Pennsylvania 15222, and our telephone number is (412) 288-4600. We also maintain a website at GNC.com. The information contained on, or that can be accessed through, our website is not part of, and is not incorporated into, this prospectus. We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business. Our service marks and trademarks include the GNC® name. Each trademark, trade name, or service mark of any other company appearing in this prospectus belongs to its holder. Use or display by us of other parties' trademarks, trade names, or service marks is not intended to and does not imply a relationship with, or endorsement or sponsorship by us of, the trademark, trade name, or service mark owner.



          We have not authorized anyone to provide any information or make any representations other than the information and representations in this prospectus or any free writing prospectus that we have authorized to be delivered to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is not an offer to sell or a solicitation of an offer to buy shares in any jurisdiction where an offer or sale of shares would be unlawful. The information in this prospectus is complete and accurate only as of the date on the front cover regardless of the time of delivery of this prospectus or of any sale of shares of our Class A common stock.




Market & Industry Information

          Throughout this prospectus, we use market data and industry forecasts and projections that were obtained from surveys and studies conducted by third parties, including the Nutrition Business Journal, Beanstalk Marketing and LJS & Associates, and The Buxton Company, and from publicly available industry and general publications. Although we believe that the sources are reliable, and that the information contained in such surveys and studies conducted by third parties is accurate and reliable, we have not independently verified the information contained therein. We note that estimates, in particular as they relate to general expectations concerning our industry, involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus.

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The Offering

Class A common stock offered by us

  16,000,000 shares

  

   

Class A common stock offered by the selling stockholders, some of whom are our affiliates

  6,500,000 shares

  

   

Underwriters' option to purchase additional shares of Class A common stock from the selling stockholders in this offering

  3,375,000 shares

  

   

Class A common stock outstanding after this offering

  87,444,748 shares

  

   

Class B common stock outstanding after this offering

  16,103,245 shares

  

   

Voting rights

  Each share of our Class A common stock entitles its holder to one vote per share on all matters to be voted upon by our stockholders. Each share of our Class B common stock entitles its holder to one vote per share on all matters to be voted upon by our stockholders, except with respect to the election or removal of directors on which the holders of shares of our Class B common stock are not entitled to vote. As discussed above under "— The Sponsors", Ares and OTPP will be parties to the New Stockholders Agreement pursuant to which they will have the ability to initially appoint all of the directors to our board.

  

   

Conversion rights

  The shares of Class A common stock are convertible into shares of Class B common stock, in whole or in part, at any time and from time to time at the option of the holder so long as such holder holds Class B common stock, on the basis of one share of Class B common stock for each share of Class A common stock that it wishes to convert. The shares of Class B common stock are convertible into shares of Class A common stock, in whole or in part, at any time and from time to time at the option of the holder, on the basis of one share of Class A common stock for each share of Class B common stock that it wishes to convert.

  

   

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Use of proceeds

  We estimate that the net proceeds to us from this offering will be approximately $237.6 million (based on the midpoint of the price range set forth on the front cover of this prospectus), after deducting underwriting discounts and commissions and estimated offering expenses payable by us. In connection with the Refinancing, Centers used a portion of the net proceeds of the Term Loan Facility, together with cash on hand, to pay a dividend to Holdings of $185.0 million and to make a contribution to GNC Funding of $85.0 million, which amount GNC Funding then loaned to Holdings. We expect to use such amounts, together with the net proceeds we receive from this offering and $26.0 million of cash on hand, to redeem all of our outstanding shares of Series A preferred stock immediately following completion of this offering, to contribute $300.0 million to Centers to repay outstanding borrowings under its Term Loan Facility, and to satisfy our obligations under the ACOF Management Services Agreement and the Class B common stock. We will not receive any proceeds from the sale of any shares of Class A common stock by the selling stockholders. See "Use of Proceeds".

  

   

  Ares, OTPP and members of our management hold substantially all of our outstanding Series A preferred stock and funds affiliated with Ares hold approximately 10% of the outstanding loans under the Senior Credit Facility.

  

   

Dividend policy

  Although the holders of our common stock will be entitled to receive dividends when and as declared by our board of directors from legally available sources, subject to the prior rights of the holders of our preferred stock, if any, we do not anticipate paying any dividends on our common stock in the foreseeable future. See "Dividend Policy." Any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including restrictions in our debt instruments, our future earnings, capital requirements, financial condition, future prospects, and applicable Delaware law, which provides that dividends are only payable out of surplus or current net profits.

  

   

Proposed New York Stock Exchange trading symbol

  "GNC"

  

   

Risk factors

  For a discussion of risks relating to our business and an investment in our Class A common stock, see "Risk Factors" beginning on page 16.

          The number of shares of Class A common stock to be outstanding after completion of this offering is based on 22,500,000 shares of our Class A common stock to be sold in this offering

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and, except where we state otherwise, the Class A common stock information we present in this prospectus:

    includes the shares of Class A common stock to be issued by us upon the closing of this offering;

    assumes that, prior to this offering, 12,065,316 shares of Class B common stock are converted into in an equal number of shares of Class A common stock;

    assumes an initial public offering price of $16.00 per share of Class A common stock, the midpoint of the range set forth on the cover of this prospectus;

    excludes 9,649,443 shares of Class A common stock subject to outstanding stock options with a weighted average exercise price of $8.30 per share; and

    excludes 7,930,000 shares of Class A common stock available for future grant or issuance under our stock plans.

          Unless we specifically state otherwise, the information in this prospectus does not take into account the sale of up to 3,375,000 shares of our Class A common stock that the underwriters have the option to purchase from the selling stockholders.

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Summary Consolidated Financial Data

          The summary consolidated financial data presented below as of December 31, 2010 and for the years ended December 31, 2010, 2009 and 2008 are derived from our audited consolidated financial statements and footnotes included in this prospectus.

          The summary consolidated financial data is presented on an actual basis for and as of the periods indicated and on an as adjusted basis giving effect to 1) the completion of this offering, 2) the application of the estimated net proceeds from this offering, as described under "Use of Proceeds", including the redemption of all outstanding shares of our Series A preferred stock immediately following completion of this offering, 3) the Refinancing, including the application of the net proceeds therefrom as described under "Use of Proceeds" and "Prospectus Summary — Recent Developments", 4) prior to the consummation of this offering, the conversion of 12,065,316 shares of Class B common stock into an equal number of shares of Class A common stock, and 5) our use of cash on hand to satisfy our obligations under the ACOF Management Services Agreement and our Class B common stock (see "Certain Relationships and Related Transactions — ACOF Management Services Agreement" and "— Special Dividend").

          Our results for interim periods are not necessarily indicative of our results for a full year of operations. The following summary consolidated financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and footnotes included elsewhere in this prospectus.

 
 
Year Ended
December 31,
2010
 
Year Ended
December 31,
2009
 
Year Ended
December 31,
2008
 
 
  (dollars in millions,
except share data and as noted)

 

Statement of Income Data:

                   

Total revenues

  $ 1,822.2   $ 1,707.0   $ 1,656.7  

Gross profit

    642.3     590.6     574.1  

Operating income

    212.4     181.0     169.6  

Interest expense, net

    65.4     69.9     83.0  

Net income

    96.6     69.5     54.6  

Earnings per share(1):

                   
   

Basic

  $ 0.87   $ 0.58   $ 0.43  
   

Diluted

  $ 0.85   $ 0.58   $ 0.43  

Other Data:

                   

Net cash provided by operating activities

    141.5     114.0     77.4  

Net cash used in investing activities

    (36.1 )   (42.2 )   (60.4 )

Net cash used in financing activities

    (1.5 )   (26.4 )   (1.4 )

EBITDA(2)

    259.4     227.7     212.1  

Capital expenditures(3)

    32.5     28.7     48.7  

Number of Stores (at end of period):

                   
 

Company-owned stores(4)

    2,917     2,832     2,774  
 

Franchise stores(4)

    2,340     2,216     2,144  
 

Store-within-a-store franchise locations(4)

    2,003     1,869     1,712  

Same Store Sales Growth:(5)

                   
 

Domestic company-owned, including web

    5.6 %   2.8 %   2.7 %
 

Domestic franchise

    2.9 %   0.9 %   0.7 %

Average revenue per domestic company-owned store (dollars in thousands)

  $ 438.2   $ 422.4   $ 418.1  

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  Year ended
December 31, 2010
 
 
 
Actual
 
As Adjusted(6)
 

Income (loss) Per Share — Basic & Diluted (in thousands):

             

Net income

  $ 96,567   $ 111,947  

Preferred stock dividends

    (20,606 )    
           

Net income available to common stockholders

  $ 75,961   $ 111,947  
           

Earnings per share:

             
 

Basic

  $ 0.87   $ 1.08  
 

Diluted

  $ 0.85   $ 1.06  

Weighted average common shares outstanding (in thousands):

             
 

Basic

    87,339     103,520  
 

Diluted

    88,917     105,684  

 

 
  As of December 31, 2010  
 
 
Actual
 
As Adjusted(6)
 
 
  (Dollars in millions)
 

Balance Sheet Data:

             

Cash and cash equivalents

  $ 193.9   $ 6.9  

Working capital(7)

    484.5     353.3  

Total assets

    2,425.1     2,248.7  

Total current and non-current long-term debt

    1,058.5     902.9  

Preferred stock

    218.4      

Total stockholders' equity

    619.5     836.2  

(1)
Includes impact of dividends on our Series A preferred stock.

(2)
We define EBITDA as net income before interest expense (net), income tax expense, depreciation and amortization. Management uses EBITDA as a tool to measure operating performance of the business. EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, operating income, or any other performance measures derived in accordance with U.S. GAAP, or as an alternative to U.S. GAAP cash flow from operating activities, as a measure of our profitability or liquidity.

The following table reconciles EBITDA to net income as determined in accordance with GAAP for the periods indicated:

 
 
Year Ended
December 31,
2010
 
Year Ended
December 31,
2009
 
Year Ended
December 31,
2008
 
 
  (dollars in millions)
 

Net income

  $ 96.6   $ 69.5   $ 54.6  

Interest expense, net

    65.4     69.9     83.0  

Income tax expense

    50.4     41.6     32.0  

Depreciation and amortization

    47.0     46.7     42.5  
               

EBITDA

  $ 259.4 (a) $ 227.7 (b) $ 212.1 (b)
               

(a)
For the year ended December 31, 2010, EBITDA includes the following expenses: $1.5 million related to payments to the Sponsors under the ACOF Management Services Agreement and Class B common stock, which payments will cease following this offering, and $4.0 million of non-recurring expenses principally related to the exploration of strategic alternatives.

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(b)
For each of the years ended December 31, 2010, 2009 and 2008, EBITDA includes $1.5 million related to payments to the Sponsors under the ACOF Management Services Agreement and Class B common stock, which payments will cease following this offering.
(3)
Capital expenditures for the year ended December 31, 2008 includes approximately $10.1 million incurred in conjunction with our store register upgrade program.

(4)
The following table summarizes our locations for the periods indicated:

 
 
Year Ended
December 31,
2010
 
Year Ended
December 31,
2009
 
Year Ended
December 31,
2008
 

Company-Owned Stores

                   

Beginning of period

    2,832     2,774     2,745  

Store openings

    101     45     71  

Franchise conversions(a)

    24     53     33  

Store closings(b)

    (40 )   (40 )   (75 )
               

End of period balance

    2,917     2,832     2,774  
               

Franchise Stores

                   
 

Domestic

                   

Beginning of period

    909     954     978  

Store openings(b)

    42     31     41  

Store closings(c)

    (48 )   (76 )   (65 )
               

End of period balance

    903     909     954  
               

International

                   

Beginning of period

    1,307     1,190     1,078  

Store openings

    232     187     198  

Store closings

    (102 )   (70 )   (86 )
               

End of period balance

    1,437     1,307     1,190  
               

Store-within-a-Store (Rite Aid)

                   

Beginning of period

    1,869     1,712     1,358  

Store openings

    150     177     401  

Store closings

    (16 )   (20 )   (47 )
               

End of period balance

    2,003     1,869     1,712  
               

Total stores

    7,260     6,917     6,630  
               

(a)
Stores that were acquired from franchisees and subsequently converted into company-owned stores.

(b)
Includes corporate store locations acquired by franchisees.

(c)
Includes franchise stores closed and acquired by us.
(5)
Same store sales growth reflects the percentage change in same store sales in the period presented compared to the prior year period. Same store sales are calculated on a daily basis for each store and exclude the net sales of a store for any period if the store was not open during the same period of the prior year. Beginning in the first quarter of 2006, we also included our internet sales, as generated through GNC.com and www.drugstore.com, in our domestic company-owned same store sales calculation. When a store's square footage has been changed as a result of reconfiguration or relocation in the same mall or shopping center, the store continues to be treated as a same store. If, during the period presented, a store was closed, relocated to a different mall or shopping center, or converted to a franchise store or a company-owned store, sales from that store up to and including the closing day or the day immediately preceding the relocation or conversion are included as same store sales as long as the store was open during the same period of the

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    prior year. We exclude from the calculation sales during the period presented that occurred on or after the date of relocation to a different mall or shopping center or the date of a conversion.

(6)
The unaudited pro forma income statement information for the year ended December 31, 2010 gives effect to an adjustment to interest expense and related income taxes due to the Refinancing, including certain adjustments resulting from the termination of the swap agreements as described under "Management's Discussion and Analysis of Financial Condition and Results of Operations — Qualitative and Quantitative Disclosures About Market Risk". The unaudited pro forma balance sheet information at December 31, 2010 gives effect to this offering and the Refinancing.

(7)
Working capital represents current assets less current liabilities.

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RISK FACTORS

          You should carefully consider the risks described below and all other information contained in this prospectus before making an investment decision. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our Class A common stock could decline, and you may lose part or all of your investment.

Risks Relating to Our Business and Industry

We may not effectively manage our growth, which could materially harm our business.

          We expect that our business will continue to grow, which may place a significant strain on our management, personnel, systems and resources. We must continue to improve our operational and financial systems and managerial controls and procedures, and we will need to continue to expand, train and manage our technology and workforce. We must also maintain close coordination among our technology, compliance, accounting, finance, marketing and sales organizations. We cannot assure you that we will manage our growth effectively. If we fail to do so, our business could be materially harmed.

          Our continued growth will require an increased investment by us in technology, facilities, personnel, and financial and management systems and controls. It also will require expansion of our procedures for monitoring and assuring our compliance with applicable regulations, and we will need to integrate, train and manage a growing employee base. The expansion of our existing businesses, any expansion into new businesses and the resulting growth of our employee base will increase our need for internal audit and monitoring processes that are more extensive and broader in scope than those we have historically required. We may not be successful in identifying or implementing all of the processes that are necessary. Further, unless our growth results in an increase in our revenues that is proportionate to the increase in our costs associated with this growth, our operating margins and profitability will be adversely affected.

We operate in a highly competitive industry. Our failure to compete effectively could adversely affect our market share, revenues, and growth prospects.

          The U.S. nutritional supplements retail industry is large and highly fragmented. Participants include specialty retailers, supermarkets, drugstores, mass merchants, multi-level marketing organizations, on-line merchants, mail-order companies and a variety of other smaller participants. We believe that the market is also highly sensitive to the introduction of new products, which may rapidly capture a significant share of the market. In the United States, we also compete for sales with heavily advertised national brands manufactured by large pharmaceutical and food companies, as well as other retailers. In addition, as some products become more mainstream, we experience increased price competition for those products as more participants enter the market. Our international competitors include large international pharmacy chains, major international supermarket chains, and other large U.S.-based companies with international operations. Our wholesale and manufacturing operations compete with other wholesalers and manufacturers of third-party nutritional supplements. We may not be able to compete effectively and our attempt to do so may require us to reduce our prices, which may result in lower margins. Failure to effectively compete could adversely affect our market share, revenues, and growth prospects.

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Unfavorable publicity or consumer perception of our products and any similar products distributed by other companies could cause fluctuations in our operating results and could have a material adverse effect on our reputation, the demand for our products, and our ability to generate revenues.

          We are highly dependent upon consumer perception of the safety and quality of our products, as well as similar products distributed by other companies. Consumer perception of products can be significantly influenced by scientific research or findings, national media attention, and other publicity about product use. A product may be received favorably, resulting in high sales associated with that product that may not be sustainable as consumer preferences change. Future scientific research or publicity could be unfavorable to our industry or any of our particular products and may not be consistent with earlier favorable research or publicity. A future research report or publicity that is perceived by our consumers as less favorable or that questions earlier research or publicity could have a material adverse effect on our ability to generate revenues. For example, sales of some of our products, such as those containing ephedra, were initially strong, but decreased as a result of negative publicity and an ultimate ban of such products by the Food and Drug Administration (the "FDA"). As such, period-to-period comparisons of our results should not be relied upon as a measure of our future performance. Adverse publicity in the form of published scientific research or otherwise, whether or not accurate, that associates consumption of our products or any other similar products with illness or other adverse effects, that questions the benefits of our or similar products, or that claims that such products are ineffective could have a material adverse effect on our reputation, the demand for our products, and our ability to generate revenues.

Our failure to appropriately respond to changing consumer preferences and demand for new products could significantly harm our customer relationships and product sales.

          Our business is particularly subject to changing consumer trends and preferences. Our continued success depends in part on our ability to anticipate and respond to these changes, and we may not be able to respond in a timely or commercially appropriate manner to these changes. If we are unable to do so, our customer relationships and product sales could be harmed significantly.

          Furthermore, the nutritional supplements industry is characterized by rapid and frequent changes in demand for products and new product introductions. Our failure to accurately predict these trends could negatively impact consumer opinion of our stores as a source for the latest products. This could harm our customer relationships and cause losses to our market share. The success of our new product offerings depends upon a number of factors, including our ability to accurately anticipate customer needs; innovate and develop new products; successfully commercialize new products in a timely manner; price our products competitively; manufacture and deliver our products in sufficient volumes and in a timely manner; and differentiate our product offerings from those of our competitors.

          If we do not introduce new products or make enhancements to meet the changing needs of our customers in a timely manner, some of our products could become obsolete, which could have a material adverse effect on our revenues and operating results.

Our substantial debt could adversely affect our results of operations and financial condition and otherwise adversely impact our operating income and growth prospects.

          As of December 31, 2010, after giving effect to the Refinancing and this offering (including the use of proceeds), our total consolidated long-term debt (including current portion) would have been

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approximately $902.9 million, and we would have had an additional $71.2 million available under the Revolving Credit Facility after giving effect to $8.8 million utilized to secure letters of credit.

          All of the debt under the Senior Credit Facility bears interest at variable rates. Our unhedged debt is subject to additional interest expense if these rates increase significantly, which could also reduce our ability to borrow additional funds.

          Our substantial debt could have material consequences on our financial condition. For example, it could:

    increase our vulnerability to general adverse economic and industry conditions;

    require us to use all or a large portion of our cash flow from operations to pay principal and interest on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, and other business activities;

    limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

    restrict us from making strategic acquisitions or exploiting business opportunities;

    place us at a competitive disadvantage compared to our competitors that have less debt; and

    limit our ability to borrow additional funds or pay cash dividends.

          For additional information regarding the interest rates and maturity dates of our existing debt, see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources".

          We and our subsidiaries may be able to incur additional debt in the future, including collateralized debt. Although the Senior Credit Facility contains restrictions on the incurrence of additional debt, these restrictions are subject to a number of qualifications and exceptions. If additional debt is added to our current level of debt, the risks described above would increase.

Our ability to continue to access credit on the terms previously obtained for the funding of our operations and capital projects may be limited due to changes in credit markets.

          In recent periods, the credit markets and the financial services industry have experienced disruption characterized by the bankruptcy, failure, collapse or sale of various financial institutions, increased volatility in securities prices, diminished liquidity and credit availability and intervention from the United States and other governments. Continued concerns about the systemic impact of potential long-term or widespread downturn, energy costs, geopolitical issues, the availability and cost of credit, the global commercial and residential real estate markets and related mortgage markets and reduced consumer confidence have contributed to increased market volatility. The cost and availability of credit has been and may continue to be adversely affected by these conditions. We cannot be certain that funding for our capital needs will be available from our existing financial institutions and the credit markets if needed, and if available, to the extent required, and on acceptable terms. The Revolving Credit Facility matures in March 2016. If we cannot renew or refinance this facility upon its maturity or, more generally, obtain funding when needed, in each case on acceptable terms, we may be unable to continue our current rate of growth and store expansion, which may have an adverse effect on our revenues and results of operations.

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We require a significant amount of cash to service our debt. Our ability to generate cash depends on many factors beyond our control and, as a result, we may not be able to make payments on our debt obligations.

          We may be unable to generate sufficient cash flow from operations or to obtain future borrowings under our credit facilities or otherwise in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs. In addition, because we conduct our operations through our operating subsidiaries, we depend on those entities for dividends and other payments to generate the funds necessary to meet our financial obligations, including payments on our debt. Under certain circumstances, legal and contractual restrictions, as well as the financial condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our subsidiaries. If we do not have sufficient liquidity, we may need to refinance or restructure all or a portion of our debt on or before maturity, sell assets, or borrow more money, which we may not be able to do on terms satisfactory to us or at all. In addition, any refinancing could be at higher interest rates and may require us to comply with more onerous covenants which could further restrict our business operations.

          If we are unable to meet our obligations with respect to our debt, we could be forced to restructure or refinance our debt, seek equity financing, or sell assets. A default on any of our debt obligations could trigger certain acceleration clauses and cause those and our other obligations to become immediately due and payable. Upon an acceleration of any of our debt, we may not be able to make payments under our other outstanding debt.

Restrictions in the agreements governing our existing and future indebtedness may prevent us from taking actions that we believe would be in the best interest of our business.

          The agreements governing our existing indebtedness contain and the agreements governing our future indebtedness will likely contain customary restrictions on us or our subsidiaries, including covenants that restrict us or our subsidiaries, as the case may be, from:

    incurring additional indebtedness and issuing preferred stock;

    granting liens on our assets;

    making investments;

    consolidating or merging with, or acquiring, another business;

    selling or otherwise disposing of our assets;

    paying dividends and making other distributions to our stockholders;

    entering into transactions with our affiliates; and

    incurring capital expenditures in excess of limitations set within the agreement.

          The Revolving Credit Facility also requires that, to the extent borrowings thereunder exceed $25 million, we meet a senior secured debt ratio of consolidated senior secured debt to consolidated EBITDA. See "Description of Certain Debt — Senior Credit Facility" for additional information. If we fail to satisfy such ratio, then we will be restricted from drawing the remaining $55 million of available borrowings under the Revolving Credit Facility, which may impair our liquidity.

          Our ability to comply with these covenants and other provisions of the Senior Credit Facility may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments, or other events beyond our control. The breach of any of these covenants could result in a default under our debt, which could

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cause those and other obligations to become immediately due and payable. In addition, these restrictions may prevent us from taking actions that we believe would be in the best interest of our business and may make it difficult for us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted.

We depend on the services of key executives and changes in our management team could affect our business strategy and adversely impact our performance and results of operations.

          Our senior executives are important to our success because they have been instrumental in setting our strategic direction, operating our business, identifying, recruiting and training key personnel, identifying opportunities and arranging necessary financing. Losing the services of any of these individuals could adversely affect our business until a suitable replacement is hired. We believe that our senior executives could not be replaced quickly with executives of equal experience and capabilities. We do not maintain key person life insurance policies on any of our executives.

If our risk management methods are not effective, our business, reputation and financial results may be adversely affected.

          We have methods to identify, monitor and manage our risks; however, these methods may not be fully effective. Some of our risk management methods may depend upon evaluation of information regarding markets, customers or other matters that are publicly available or otherwise accessible by us. That information may not in all cases be accurate, complete, up-to-date or properly evaluated. If our methods are not fully effective or we are not successful in monitoring or evaluating the risks to which we are or may be exposed, our business, reputation, financial condition and operating results could be materially and adversely affected. In addition, our insurance policies may not provide adequate coverage.

Compliance with new and existing governmental regulations could increase our costs significantly and adversely affect our results of operations.

          The processing, formulation, manufacturing, packaging, labeling, advertising, and distribution of our products are subject to federal laws and regulation by one or more federal agencies, including the FDA, the Federal Trade Commission (the "FTC"), the Consumer Product Safety Commission, the United States Department of Agriculture, and the Environmental Protection Agency. These activities are also regulated by various state, local, and international laws and agencies of the states and localities in which our products are sold. Government regulations may prevent or delay the introduction, or require the reformulation, of our products, which could result in lost revenues and increased costs to us. For instance, the FDA regulates, among other things, the composition, safety, labeling, and marketing of dietary supplements (including vitamins, minerals, herbs, and other dietary ingredients for human use). The FDA may not accept the evidence of safety for any new dietary ingredient that we may wish to market, may determine that a particular dietary supplement or ingredient presents an unacceptable health risk, and may determine that a particular claim or statement of nutritional value that we use to support the marketing of a dietary supplement is an impermissible drug claim, is not substantiated, or is an unauthorized version of a "health claim". See "Business — Government Regulation — Product Regulation" for additional information. Any of these actions could prevent us from marketing particular dietary supplement products or making certain claims or statements with respect to those products. The FDA could also require us to remove a particular product from the market. Any future recall or removal would result in additional costs to us, including lost revenues from any products that we are required to remove from the market, any of which could be material. Any product recalls or removals could also lead to liability, substantial costs, and reduced growth prospects. For more information, see

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"— We may experience product recalls, which could reduce our sales and margin and adversely affect our results of operations".

          Additional or more stringent regulations of dietary supplements and other products have been considered from time to time. These developments could require reformulation of some products to meet new standards, recalls or discontinuance of some products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of some products, additional or different labeling, additional scientific substantiation, adverse event reporting, or other new requirements. Any of these developments could increase our costs significantly. The FDA has announced that it plans to publish a guidance governing the notification of new dietary ingredients. Although FDA guidance is not mandatory, it is a strong indication of the FDA's current views on the topic discussed in the guidance, including its position on enforcement. Depending on its recommendations, particularly those relating to animal or human testing, such guidance could also raise our costs and negatively impact our business in several ways, including the potential that the FDA might seek to enjoin the manufacturing of our products because of violation of the Good Manufacturing Practice ("GMP") regulations until the FDA determines that we are in compliance and can resume manufacturing. We may not be able to comply with the new rules without incurring additional expenses, which could be significant. For example, the Dietary Supplement Safety Act (S3002) was introduced in February 2010 and contains many restrictive provisions on the sale of dietary supplements, including, but not limited to, provisions that limit the dietary ingredients acceptable for use in dietary supplements, increased fines for violations of the Dietary Supplement Health and Education Act of 1994 ("DSHEA"), and increased registration and reporting requirements with the FDA. If reintroduced and enacted, this bill could severely restrict the number of dietary supplements available for sale and increase our costs and potential penalties associated with selling dietary supplements.

Our failure to comply with FTC regulations and existing consent decrees imposed on us by the FTC could result in substantial monetary penalties and could adversely affect our operating results.

          The FTC exercises jurisdiction over the advertising of dietary supplements and has instituted numerous enforcement actions against dietary supplement companies, including us, for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims. As a result of these enforcement actions, we are currently subject to three consent decrees that limit our ability to make certain claims with respect to our products and required us in the past to pay civil penalties and other amounts in the aggregate amount of $3.0 million. See "Business — Government Regulation — Product Regulation" for more information. Failure by us or our franchisees to comply with the consent decrees and applicable regulations could occur from time to time. Violations of these orders could result in substantial monetary penalties, which could have a material adverse effect on our financial condition or results of operations.

We may incur material product liability claims, which could increase our costs and adversely affect our reputation, revenues, and operating income.

          As a retailer, distributor, and manufacturer of products designed for human consumption, we are subject to product liability claims if the use of our products is alleged to have resulted in injury. Our products consist of vitamins, minerals, herbs and other ingredients that are classified as foods or dietary supplements and are not subject to pre-market regulatory approval in the United States. Our products could contain contaminated substances, and some of our products contain ingredients that do not have long histories of human consumption. Previously unknown adverse reactions resulting from human consumption of these ingredients could occur.

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          In addition, third-party manufacturers produce many of the products we sell. As a distributor of products manufactured by third parties, we may also be liable for various product liability claims for products we do not manufacture. Although our purchase agreements with our third-party vendors typically require the vendor to indemnify us to the extent of any such claims, any such indemnification is limited by its terms. Moreover, as a practical matter, any such indemnification is dependent on the creditworthiness of the indemnifying party and its insurer, and the absence of significant defenses by the insurers. We may be unable to obtain full recovery from the insurer or any indemnifying third party in respect of any claims against us in connection with products manufactured by such third party.

          We have been and may be subject to various product liability claims, including, among others, that our products include inadequate instructions for use or inadequate warnings concerning possible side effects and interactions with other substances. For example, as of December 31, 2010, there were 50 pending lawsuits related to Hydroxycut in which GNC had been named, including 44 individual, largely personal injury claims and six putative class action cases. See "Business — Legal Proceedings".

          Even with adequate insurance and indemnification, product liability claims could significantly damage our reputation and consumer confidence in our products. Our litigation expenses could increase as well, which also could have a materially negative impact on our results of operations even if a product liability claim is unsuccessful or is not fully pursued.

We may experience product recalls, which could reduce our sales and margin and adversely affect our results of operations.

          We may be subject to product recalls, withdrawals or seizures if any of the products we formulate, manufacture or sell are believed to cause injury or illness or if we are alleged to have violated governmental regulations in the manufacturing, labeling, promotion, sale or distribution of such products. For example, in May 2009, the FDA warned consumers to stop using Hydroxycut diet products, which are produced by Iovate Health Sciences, Inc. ("Iovate") and were sold in our stores. Iovate issued a voluntary recall, with which we fully complied. Sales of the recalled Hydroxycut products amounted to approximately $57.8 million, or 4.7% of our retail sales in 2008, and $18.8 million, or 4.2% of our retail sales in the first four months of 2009. We provided refunds or gift cards to consumers who returned these products to our stores. In the second quarter of 2009, we experienced a reduction in sales and margin due to this recall as a result of accepting returns of products from customers and a loss of sales as a replacement product was not available. Through December 31, 2010, we estimate that we have refunded approximately $3.5 million to our retail customers and approximately $1.6 million to our wholesale customers for Hydroxycut product returns. Our results of operations may continue to be affected by the Hydroxycut recall. Any additional recall, withdrawal or seizure of any of the products we formulate, manufacture or sell would require significant management attention, would likely result in substantial and unexpected expenditures and could materially and adversely affect our business, financial condition or results of operations. Furthermore, a recall, withdrawal or seizure of any of our products could materially and adversely affect consumer confidence in our brands and decrease demand for our products.

          As is common in our industry, we rely on our third-party vendors to ensure that the products they manufacture and sell to us comply with all applicable regulatory and legislative requirements. In general, we seek representations and warranties, indemnification and/or insurance from our vendors. However, even with adequate insurance and indemnification, any claims of non-compliance could significantly damage our reputation and consumer confidence in our products. In addition, the failure of such products to comply with applicable regulatory and legislative requirements could prevent us from marketing the products or require us to recall or remove such products from the market, which in certain cases could materially and adversely affect our

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business, financial condition and results of operation. For example, we sell products manufactured by third parties that contain derivatives from geranium, known as 1.3-dimethylpentylamine/dimethylamylamine/13-dimethylamylamine ("1.3d/d/13d"). Although we have received representations from our third-party vendors that these products comply with applicable regulatory and legislative requirements, recent media articles have suggested that 1.3d/d/13d may not comply with DSHEA. If it is determined that 1.3d/d/13d does not comply with applicable regulatory and legislative requirements, we could be required to recall or remove from the market all products containing 1.3d/d/13d, which could materially and adversely affect our business, financial condition and results of operations. In the past, we have attempted to offset any losses related to recalls and removals with reformulated or alternative products; however, there can be no assurance that we would be able to offset all or any portion of such losses related to any future removal or recall.

Our operations are subject to environmental and health and safety laws and regulations that may increase our cost of operations or expose us to environmental liabilities.

          Our operations are subject to environmental and health and safety laws and regulations, and some of our operations require environmental permits and controls to prevent and limit pollution of the environment. We could incur significant costs as a result of violations of, or liabilities under, environmental laws and regulations, or to maintain compliance with such environmental laws, regulations, or permit requirements. For example, in March 2008, the South Carolina Department of Health and Environmental Control ("DHEC") requested that we investigate contamination associated with historical activities at our South Carolina facility. These investigations have identified chlorinated solvent impacts in soils and groundwater that extend offsite from our facility. We are continuing these investigations in order to understand the extent of these impacts and develop appropriate remedial measures for DHEC approval. At this stage of the investigation, however, it is not possible to accurately estimate the timing and extent of any remedial action that may be required, the ultimate cost of remediation, or the amount of our potential liability.

          In addition to the foregoing, we are subject to numerous federal, state, local, and foreign environmental and health and safety laws and regulations governing our operations, including the handling, transportation, and disposal of our non-hazardous and hazardous substances and wastes, as well as emissions and discharges from its operations into the environment, including discharges to air, surface water, and groundwater. Failure to comply with such laws and regulations could result in costs for remedial actions, penalties, or the imposition of other liabilities. New laws, changes in existing laws or the interpretation thereof, or the development of new facts or changes in their processes could also cause us to incur additional capital and operating expenditures to maintain compliance with environmental laws and regulations and environmental permits. We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment without regard to fault or knowledge about the condition or action causing the liability. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or for properties to which substances or wastes that were sent in connection with current or former operations at its facilities. The presence of contamination from such substances or wastes could also adversely affect our ability to sell or lease our properties, or to use them as collateral for financing.

We are not insured for a significant portion of our claims exposure, which could materially and adversely affect our operating income and profitability.

          We have procured insurance independently for the following areas: (1) general liability; (2) product liability; (3) directors and officers liability; (4) property insurance; (5) workers' compensation insurance; and (6) various other areas. In addition, although we believe that we will continue to be able to obtain insurance in these areas in the future, because of increased selectivity

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by insurance providers, we may only be able to obtain such insurance at increased rates and/or with reduced coverage levels. Furthermore, we are self-insured for other areas, including: (1) medical benefits; (2) physical damage to our tractors, trailers, and fleet vehicles for field personnel use; and (3) physical damages that may occur at company-owned stores. We are not insured for some property and casualty risks due to the frequency and severity of a loss, the cost of insurance, and the overall risk analysis. In addition, we carry product liability insurance coverage that requires us to pay deductibles/retentions with primary and excess liability coverage above the deductible/retention amount. Because of our deductibles and self-insured retention amounts, we have significant exposure to fluctuations in the number and severity of claims. We currently maintain product liability insurance with a retention of $3.0 million per claim with an aggregate cap on retained loss of $10.0 million. We could raise our deductibles/retentions, which would increase our already significant exposure to expense from claims. If any claim exceeds our coverage, we would bear the excess expense, in addition to our other self-insured amounts. If the frequency or severity of claims or our expenses increase, our operating income and profitability could be materially adversely affected. See "Business — Legal Proceedings".

Because we rely on our manufacturing operations to produce nearly all of the proprietary products we sell, disruptions in our manufacturing system or losses of manufacturing certifications could adversely affect our sales and customer relationships.

          Our manufacturing operations produced approximately 35% of the products we sold for each of the years ended December 31, 2010 and 2009. Other than powders and liquids, nearly all of our proprietary products are produced in our manufacturing facility located in Greenville, South Carolina. During 2010, no one vendor supplied more than 10% of our raw materials. In the event any of our third-party suppliers or vendors becomes unable or unwilling to continue to provide raw materials in the required volumes and quality levels or in a timely manner, we would be required to identify and obtain acceptable replacement supply sources. If we are unable to identify and obtain alternative supply sources, our business could be adversely affected. Any significant disruption in our operations at our Greenville, South Carolina facility for any reason, including regulatory requirements, an FDA determination that the facility is not in compliance with GMPs, the loss of certifications, power interruptions, fires, hurricanes, war or other force of nature, could disrupt our supply of products, adversely affecting our sales and customer relationships.

An increase in the price and shortage of supply of key raw materials could adversely affect our business.

          Our products are composed of certain key raw materials. If the prices of these raw materials were to increase significantly, it could result in a significant increase to us in the prices our contract manufacturers and third-party manufacturers charge us for our GNC-branded products and third-party products. Raw material prices may increase in the future and we may not be able to pass on such increases to our customers. A significant increase in the price of raw materials that cannot be passed on to customers could have a material adverse effect on our results of operations and financial condition. In addition, if we no longer are able to obtain products from one or more of our suppliers on terms reasonable to us or at all, our revenues could suffer. Events such as the threat of political or social unrest, or the perceived threat thereof, may also have a significant impact on raw material prices and transportation costs for our products. In addition, the interruption in supply of certain key raw materials essential to the manufacturing of our products may have an adverse impact on our suppliers' ability to provide us with the necessary products needed to maintain our customer relationships and an adequate level of sales.

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A significant disruption to our distribution network or to the timely receipt of inventory could adversely impact sales or increase our transportation costs, which would decrease our profits.

          We rely on our ability to replenish depleted inventory in our stores through deliveries to our distribution centers from vendors and then from the distribution centers or direct ship vendors to our stores by various means of transportation, including shipments by sea and truck. Unexpected delays in those deliveries or increases in transportation costs (including through increased fuel costs) could significantly decrease our ability to make sales and earn profits. In addition, labor shortages in the transportation industry or long-term disruptions to the national and international transportation infrastructure that lead to delays or interruptions of deliveries could negatively affect our business.

If we fail to protect our brand name, competitors may adopt trade names that dilute the value of our brand name, and prosecuting or defending infringement claims could cause us to incur significant expenses or prevent us from manufacturing, selling, or using some aspect of our products, which could adversely affect our revenues and market share.

          We have invested significant resources to promote our GNC brand name in order to obtain the public recognition that we have today. Because of the differences in foreign trademark laws concerning proprietary rights, our trademark may not receive the same degree of protection in foreign countries as it does in the United States. Also, we may not always be able to successfully enforce our trademark against competitors or against challenges by others. For example, third parties are challenging our "GNC Live Well" trademark in foreign jurisdictions. Our failure to successfully protect our trademark could diminish the value and effectiveness of our past and future marketing efforts and could cause customer confusion. This could in turn adversely affect our revenues and profitability.

          We are currently and may in the future be subject to intellectual property litigation and infringement claims, which could cause us to incur significant expenses or prevent us from manufacturing, selling or using some aspect of our products. Claims of intellectual property infringement also may require us to enter into costly royalty or license agreements. However, we may be unable to obtain royalty or license agreements on terms acceptable to us or at all. Claims that our technology or products infringe on intellectual property rights could be costly and would divert the attention of management and key personnel, which in turn could adversely affect our revenues and profitability.

A substantial amount of our revenue is generated from our franchisees, and our revenues could decrease significantly if our franchisees do not conduct their operations profitably or if we fail to attract new franchisees.

          As of December 31, 2010 and 2009, approximately 32% of our retail locations were operated by franchisees. Our franchise operations generated approximately 16.1% and 15.5% of our revenues for the years ended December 31, 2010 and 2009, respectively. Our revenues from franchise stores depend on the franchisees' ability to operate their stores profitably and adhere to our franchise standards. In the twelve months ended December 31, 2010, a net 48 domestic franchise stores were closed. The closing of franchise stores or the failure of franchisees to comply with our policies could adversely affect our reputation and could reduce the amount of our franchise revenues. These factors could have a material adverse effect on our revenues and operating income.

          If we are unable to attract new franchisees or to convince existing franchisees to open additional stores, any growth in royalties from franchise stores will depend solely upon increases in revenues at existing franchise stores. In addition, our ability to open additional franchise locations is limited by the territorial restrictions in our existing franchise agreements as well as our ability to

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identify additional markets in the United States and other countries. If we are unable to open additional franchise locations, we will have to sustain additional growth internally by attracting new and repeat customers to our existing locations.

Franchisee support of our marketing and advertising programs is critical for our success.

          The support of our franchisees is critical for the success of our marketing programs and other strategic initiatives we seek to undertake, and the successful execution of these initiatives will depend on our ability to maintain alignment with our franchisees. While we can mandate certain strategic initiatives through enforcement of our franchise agreements, we need the active support of our franchisees if the implementation of these initiatives is to be successful. In addition, our efforts to build alignment with franchisees may result in a delay in the implementation of our marketing and advertising programs and other key initiatives. Although we believe that our current relationships with our franchisees are generally good, there can be no assurance that our franchisees will continue to support our marketing programs and strategic initiatives. The failure of our franchisees to support our marketing programs and strategic initiatives could adversely affect our ability to implement our business strategy and could materially harm our business, results of operations and financial condition.

Our franchisees are independent operators and we have limited influence over their operations.

          Our revenues substantially depend upon our franchisees' sales volumes, profitability, and financial viability. However, our franchisees are independent operators and we cannot control many factors that impact the profitability of their stores. Pursuant to the franchise agreements, we can, among other things, mandate signage, equipment and hours of operation, establish operating procedures and approve suppliers, distributors and products. However, the quality of franchise store operations may be diminished by any number of factors beyond our control. Consequently, franchisees may not successfully operate stores in a manner consistent with our standards and requirements or standards set by federal, state and local governmental laws and regulations. In addition, franchisees may not hire and train qualified managers and other personnel. While we ultimately can take action to terminate franchisees that do not comply with the standards contained in our franchise agreements, any delay in identifying and addressing problems could harm our image and reputation, and our franchise revenues and results of operations could decline.

Franchise regulations could limit our ability to terminate or replace under-performing franchises, which could adversely impact franchise revenues.

          Our franchise activities are subject to federal, state, and international laws regulating the offer and sale of franchises and the governance of our franchise relationships. These laws impose registration, extensive disclosure requirements, and bonding requirements on the offer and sale of franchises. In some jurisdictions, the laws relating to the governance of our franchise relationship impose fair dealing standards during the term of the franchise relationship and limitations on our ability to terminate or refuse to renew a franchise. We may, therefore, be required to retain an under-performing franchise and may be unable to replace the franchisee, which could adversely impact franchise revenues. In addition, we cannot predict the nature and effect of any future legislation or regulation on our franchise operations.

We have limited influence over the decision of franchisees to invest in other businesses or incur excessive indebtedness.

          Our franchisees are independent operators and, therefore, we have limited influence over their ability to invest in other businesses or incur excessive indebtedness. In some cases, these franchisees have used the cash generated by their stores to expand their other businesses or to

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subsidize losses incurred by such businesses. Additionally, as independent operators, franchisees do not require our consent to incur indebtedness. Consequently, our franchisees have in the past, and may in the future, experience financial distress as a result of over leveraging. To the extent that our franchisees use the cash from their stores to subsidize their other businesses or experience financial distress, due to over-leverage or otherwise, it could negatively affect (1) our operating results as a result of delayed or reduced payments of royalties, advertising fund contributions and rents for properties we lease to them, (2) our future revenue, earnings and cash flow growth and (3) our financial condition. In addition, lenders that are adversely affected by franchisees who default on their indebtedness may be less likely to provide current or prospective franchisees necessary financing on favorable terms or at all.

If we cannot open new company-owned stores on schedule and profitably, or if our new store formats are not successful, our planned future growth will be impeded, which would adversely affect sales.

          Our growth is dependent on both increases in sales in existing stores and the ability to open profitable new stores. Increases in sales in existing stores are dependent on factors such as competition, store operations and other factors discussed in these Risk Factors. Our ability to timely open new stores and to expand into additional market areas depends in part on the following factors: the availability of attractive store locations; the absence of occupancy delays; the ability to negotiate acceptable lease terms; the ability to identify customer demand in different geographic areas; the hiring, training and retention of competent sales personnel; the effective management of inventory to meet the needs of new and existing stores on a timely basis; general economic conditions; and the availability of sufficient funds for expansion. Many of these factors are beyond our control. In addition, the costs associated with opening and operating our new store formats are higher than the costs associated with opening and operating our standard modern-design stores. Delays or failures in opening new stores, including our new store formats, or achieving lower than expected sales in new stores and new store formats, or drawing a greater than expected proportion of sales in new stores or new store formats from our existing stores, could materially adversely affect our growth and profitability. In addition, we may not anticipate all of the challenges imposed by the expansion of our operations and, as a result, may not meet our targets for opening new stores, remodeling or relocating stores or expanding profitably.

          Some of our new stores may be located in areas where we have little or no meaningful experience or brand recognition. Those markets may have different competitive conditions, market conditions, consumer tastes and discretionary spending patterns than our existing markets, which may cause our new stores to be less successful than stores in our existing markets. Alternatively, many of our new stores will be located in areas where we have existing stores. Although we have experience in these markets, increasing the number of locations in these markets may result in inadvertent over-saturation of markets and temporarily or permanently divert customers and sales from our existing stores, thereby adversely affecting our overall financial performance.

Our operating results and financial condition could be adversely affected by the financial and operational performance of Rite Aid.

          As of December 31, 2010, Rite Aid operated 2,003 GNC franchise "store-within-a-store" locations and has committed to open additional franchise "store-within-a-store" locations. Revenue from sales to Rite Aid (including license fee revenue for new store openings) represented approximately 3.5% of total revenue for the year ended December 31, 2010. Any liquidity and operational issues that Rite Aid may experience could impair its ability to fulfill its obligations and commitments to us, which would adversely affect our operating results and financial condition.

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Economic, political, and other risks associated with our international operations could adversely affect our revenues and international growth prospects.

          As of December 31, 2010, we had 169 company-owned Canadian stores and 1,437 international franchise stores in 46 countries. We derived 11.1% and 10.2% of our revenues for the years ended December 31, 2010 and 2009, respectively, from our international operations. As part of our business strategy, we intend to expand our international franchise presence. Our international operations are subject to a number of risks inherent to operating in foreign countries, and any expansion of our international operations will increase the effects of these risks. These risks include, among others:

    political and economic instability of foreign markets;

    foreign governments' restrictive trade policies;

    inconsistent product regulation or sudden policy changes by foreign agencies or governments;

    the imposition of, or increase in, duties, taxes, government royalties, or non-tariff trade barriers;

    difficulty in collecting international accounts receivable and potentially longer payment cycles;

    difficulty of enforcing contractual obligations of foreign franchisees;

    increased costs in maintaining international franchise and marketing efforts;

    problems entering international markets with different cultural bases and consumer preferences;

    fluctuations in foreign currency exchange rates; and

    operating in new, developing or other markets in which there are significant uncertainties regarding the interpretation, application and enforceability of laws and regulations relating to contract and intellectual property rights.

          Any of these risks could have a material adverse effect on our international operations and our growth strategy.

We may be unable to successfully expand our operations into China and other new markets.

          If the opportunity arises, we may expand our operations into new and high-growth markets including, but not limited to, China. For example, in 2010 we commenced the process of registering products and initiating wholesale sales and distribution in China. However, there is no assurance that we will expand our operations in China and other markets in our desired time frame. To expand our operations into new markets, we may enter into business combination transactions, make acquisitions or enter into strategic partnerships, joint ventures or alliances, any of which may be material. We may enter into these transactions to acquire other businesses or products to expand our products or take advantage of new developments and potential changes in the industry. Although we have entered into a non-binding term sheet with an affiliate of Bright Food (Group) Co., Ltd. ("BFG") to market and sell nutritional supplements in China through a joint venture, the definitive documentation for the joint venture was not executed on the timeframe that we had expected and there can be no assurances that we will enter into a joint venture with BFG or any other party. Our lack of experience operating in new markets and our lack of familiarity with local economic, political and regulatory systems could prevent us from achieving the results that we expect on our anticipated timeframe or at all. If we are unsuccessful in expanding into new or high growth markets, it could adversely affect our operating results and financial condition.

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Our network and communications systems are dependent on third-party providers and are vulnerable to system interruption and damage, which could limit our ability to operate our business and could have a material adverse effect on our business, financial condition or results of operations.

          Our systems and operations and those of our third-party Internet service providers are vulnerable to damage or interruption from fire, flood, earthquakes, power loss, server failure, telecommunications and Internet service failure, acts of war or terrorism, computer viruses and denial-of-service attacks, physical or electronic breaches, sabotage, human error and similar events. Any of these events could lead to system interruptions, processing and order fulfillment delays, and loss of critical data for us, our suppliers, or our Internet service providers, and could prevent us from processing customer purchases. Any significant interruption in the availability or functionality of our website or our customer processing, distribution, or communications systems, for any reason, could seriously harm our business, financial condition, and operating results. The occurrence of any of these factors could have a material adverse effect on our business, financial condition or results of operations.

          Because we are dependent on third-party service providers for the implementation and maintenance of certain aspects of our systems and operations and because some of the causes of system interruptions may be outside of our control, we may not be able to remedy such interruptions in a timely manner, if at all. As we rely on our third-party service providers, computer and communications systems and the Internet to conduct our business, any system disruptions could have a material adverse effect on our business, financial condition or results of operations.

Privacy protection is increasingly demanding, and the introduction of electronic payment exposes us to increased risk of privacy and/or security breaches as well as other risks.

          The protection of customer, employee, vendor, franchisee and other business data is critical to us. Federal, state, provincial and international laws and regulations govern the collection, retention, sharing and security of data that we receive from and about our employees, customers, vendors and franchisees. The regulatory environment surrounding information security and privacy has been increasingly demanding in recent years, and may see the imposition of new and additional requirements. Compliance with these requirements may result in cost increases due to necessary systems changes and the development of new processes to meet these requirements by us and our franchisees. In addition, customers and franchisees have a high expectation that we will adequately protect their personal information. If we or our service provider fail to comply with these laws and regulations or experience a significant breach of customer, employee, vendor, franchisee or other company data, our reputation could be damaged and result in an increase in service charges, suspension of service, lost sales, fines, or lawsuits.

          The use of credit payment systems makes us more susceptible to a risk of loss in connection with these issues, particularly with respect to an external security breach of customer information that we or third parties (including those with whom we have strategic alliances) under arrangements with us control. In the event of a security breach, theft, leakage, accidental release or other illegal activity with respect to employee, customer, vendor, franchisee third-party, with whom we have strategic alliances or other company data, we could become subject to various claims, including those arising out of thefts and fraudulent transactions, and may also result in the suspension of credit card services. This could harm our reputation as well as divert management attention and expose us to potentially unreserved claims and litigation. Any loss in connection with these types of claims could be substantial. In addition, if our electronic payment systems are damaged or cease to function properly, we may have to make significant investments to fix or replace them, and we may suffer interruptions in our operations in the interim. In addition, we are reliant on these systems, not only to protect the security of the information stored, but also to appropriately track and record data. Any failures or inadequacies in these systems could expose us to significant unreserved

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losses, which could result in an earnings and stock price decline. Our brand reputation would likely be damaged as well.

Complying with recently enacted healthcare reform legislation could increase our costs and have a material adverse effect on our business, financial condition or results of operations.

          Recently enacted healthcare reform legislation could significantly increase our costs and have a material adverse effect on our business, financial condition and results of operations by requiring us either to provide health insurance coverage to our employees or to pay certain penalties for electing not to provide such coverage. Because these new requirements are broad, complex, subject to certain phase-in rules and may be challenged by legal actions in the coming months and years, it is difficult to predict the ultimate impact that this legislation will have on our business and operating costs. We cannot assure you that this legislation or any alternative version that may ultimately be implemented will not materially increase our operating costs. This legislation could also adversely affect our employee relations and ability to compete for new employees if our response to this legislation is considered less favorable than the responses or health benefits offered by employers with whom we compete for talent.

Our holding company structure makes us dependent on our subsidiaries for our cash flow and subordinates the rights of our stockholders to the rights of creditors of our subsidiaries in the event of an insolvency or liquidation of any of our subsidiaries.

          We are a holding company and, accordingly, substantially all of our operations are conducted through our subsidiaries. Our subsidiaries are separate and distinct legal entities. As a result, our cash flow depends upon the earnings of our subsidiaries. In addition, we depend on the distribution of earnings, loans, or other payments by our subsidiaries to us. Our subsidiaries have no obligation to provide us with funds for our payment obligations. If there is an insolvency, liquidation, or other reorganization of any of our subsidiaries, our stockholders will have no right to proceed against their assets. Creditors of those subsidiaries will be entitled to payment in full from the sale or other disposal of the assets of those subsidiaries before we, as a stockholder, would be entitled to receive any distribution from that sale or disposal.

General economic conditions, including a prolonged weakness in the economy, may affect consumer purchases, which could adversely affect our sales and the sales of our business partners.

          Our results, and those of our business partners to whom we sell, are dependent on a number of factors impacting consumer spending, including general economic and business conditions; consumer confidence; wages and employment levels; the housing market; consumer debt levels; availability of consumer credit; credit and interest rates; fuel and energy costs; energy shortages; taxes; general political conditions, both domestic and abroad; and the level of customer traffic within department stores, malls and other shopping and selling environments. Consumer product purchases, including purchases of our products, may decline during recessionary periods. A prolonged downturn or an uncertain outlook in the economy may materially adversely affect our business and our revenues and profits.

Natural disasters (whether or not caused by climate change), unusually adverse weather conditions, pandemic outbreaks, terrorist acts, and global political events could cause permanent or temporary distribution center or store closures, impair our ability to purchase, receive or replenish inventory, or cause customer traffic to decline, all of which could result in lost sales and otherwise adversely affect our financial performance.

          The occurrence of one or more natural disasters, such as hurricanes, fires, floods, and earthquakes (whether or not caused by climate change), unusually adverse weather conditions,

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pandemic outbreaks, terrorist acts or disruptive global political events, such as civil unrest in countries in which our suppliers are located, or similar disruptions could adversely affect our operations and financial performance. To the extent these events result in the closure of one or more of our distribution centers, a significant number of stores, a manufacturing facility or our corporate headquarters, or impact one or more of our key suppliers, our operations and financial performance could be materially adversely affected through an inability to make deliveries to our stores and through lost sales. In addition, these events could result in increases in fuel (or other energy) prices or a fuel shortage, delays in opening new stores, the temporary lack of an adequate work force in a market, the temporary or long-term disruption in the supply of products from some local and overseas suppliers, the temporary disruption in the transport of goods from overseas, delay in the delivery of goods to our distribution centers or stores, the temporary reduction in the availability of products in our stores and disruption to our information systems. These events also could have indirect consequences, such as increases in the cost of insurance, if they were to result in significant loss of property or other insurable damage.

Risks Relating to an Investment in Our Class A Common Stock

There has been no public market, and there can be no assurance that an active trading market will develop or be maintained, for our Class A common stock, and you may not be able to resell shares of our Class A common stock for an amount equal to or more than your purchase price.

          Prior to this offering, there has not been a public market for our Class A common stock. Therefore, stockholders should be aware that they cannot benefit from information about prior market history as to their decision to invest. Although it is anticipated that the Class A common stock will be approved for listing on the NYSE, there can be no assurance that an active trading market will develop or, if such a market does develop, how liquid that market might become or whether it will be maintained. The initial public offering price will be determined by our negotiations with the representatives of the underwriters and may not be indicative of prices that will prevail in the trading market. If an active trading market fails to develop or be maintained, you may be unable to sell the shares of Class A common stock purchased in this offering at an acceptable price or at all.

Our principal stockholders may take actions that conflict with your interests. This control may have the effect of delaying or preventing changes of control or changes in management or limiting the ability of other stockholders to approve transactions they deem to be in their best interest.

          Even after giving effect to this offering, the Sponsors will beneficially own approximately 63% of our Class A common stock, OTPP will beneficially own 100% of our Class B common stock, and the Sponsors will collectively own approximately 68% of our common stock. As a result, our Sponsors will have the power to control our affairs and policies including with respect to the election of directors (and through the election of directors the appointment of management), the entering into of mergers, sales of substantially all of our assets and other extraordinary transactions. Under the New Stockholders Agreement, the Sponsors will have the right to nominate to our board of directors, subject to their election by our stockholders, so long as the Sponsors collectively own more than 50% of the then outstanding shares of our common stock, the greater of up to nine directors and the number of directors comprising a majority of our board and, subject to certain exceptions, so long as the Sponsors collectively own 50% or less of the then outstanding shares of our common stock, that number of directors (rounded up to the nearest whole number or, if such rounding would cause the Sponsors to have the right to elect a majority of our board of directors, rounded to the nearest whole number) that is the same percentage of the total number of directors comprising our board as the collective percentage of common stock owned by the Sponsors.

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Under the New Stockholders Agreement, each Sponsor will also agree to vote in favor of the other Sponsor's nominees. Because our board of directors will be divided into three staggered classes, the Sponsors may be able to influence or control our affairs and policies even after they cease to own a majority of our outstanding Class A common stock during the period in which the Sponsors' nominees finish their terms as members of our board, but in any event no longer than would be permitted under applicable law and the NYSE listing requirements. The directors nominated by the Sponsors will have the authority, subject to the terms of our debt, to issue additional stock, implement stock repurchase programs, declare dividends, pay advisory fees and make other decisions, and they may have an interest in our doing so. The New Stockholders Agreement will also provide that, so long as the Sponsors collectively own more than one-third of our then outstanding common stock, certain significant corporate actions will require the approval of at least one of the Sponsors.

          The interests of the Sponsors could conflict with our public stockholders' interests in material respects. For example, the Sponsors could cause us to make acquisitions that increase the amount of our indebtedness or sell revenue-generating assets. Moreover, the Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. The Sponsors may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. Furthermore, due to the concentration of voting power among the Sponsors, they could influence or prevent a change of control or other business combination or any other transaction that requires the approval of stockholders, regardless of whether or not other stockholders believe that such transaction is in their best interests. In addition, our governance documents do not contain any provisions applicable to deadlocks among the members of our board, and as a result we may be precluded from taking advantage of opportunities due to disagreements among the Sponsors and their respective board designees. So long as the Sponsors continue to own a significant amount of the outstanding shares of our common stock, they will continue to be able to strongly influence or effectively control our decisions. See "Certain Relationships and Related Transactions — Stockholders Agreements".

We will be a "controlled company" within the meaning of the NYSE rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.

          After the completion of this offering, the Sponsors will continue to own more than 50% of our outstanding Class A common stock (the only class of common stock entitled to vote for the election and removal of our directors), and the Sponsors will hold more than 50% of the total voting power of our Class A common stock, and, therefore, we will be a "controlled company" under the NYSE corporate governance standards. As a controlled company, we intend to utilize certain exemptions under the NYSE standards that free us from the obligation to comply with certain NYSE corporate governance requirements, including the requirements:

    that a majority of our board of directors consists of independent directors;

    that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;

    that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

    that we conduct an annual performance evaluation of the nominating and corporate governance committee and the compensation committee.

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Following this offering, we intend to utilize these exemptions. Although we will have adopted charters for our nominating and corporate governance and compensation committees and intend to conduct annual performance evaluations for these committees, none of these committees will be composed entirely of independent directors immediately following the completion of this offering. In addition, we will rely on the phase-in rules of the Securities and Exchange Commission (the "SEC") and the NYSE with respect to the independence of our audit committee. These rules permit us to have an audit committee that has one member that is independent upon the effectiveness of the registration statement of which this prospectus forms a part, a majority of members that are independent within 90 days thereafter and all members that are independent within one year thereafter. Accordingly, you will not have the same protection afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements. See "Management — Board of Directors" for more information.

Our amended and restated certificate of incorporation and our amended and restated bylaws, as amended, will contain anti-takeover protections, which may discourage or prevent a takeover of our company, even if an acquisition would be beneficial to our stockholders.

          Upon completion of this offering, provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws, as amended, as well as provisions of the Delaware General Corporation Law (the "DGCL"), could delay or make it more difficult to remove incumbent directors or for a third party to acquire us, even if a takeover would benefit our stockholders. These provisions will include:

    a classified board of directors;

    the sole power of a majority of the board of directors to fix the number of directors;

    limitations on the removal of directors upon the Sponsors holding less than a majority of our outstanding common stock;

    the sole power of the board of directors or the Sponsors, in the case of a vacancy of a Sponsor board designee, to fill any vacancy on the board of directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise;

    the ability of our board of directors to designate one or more series of preferred stock and issue shares of preferred stock without stockholder approval;

    the inability of stockholders to act by written consent if the Sponsors own less than 50% of our outstanding common stock; and

    the inability of stockholders to call special meetings.

          Our issuance of shares of preferred stock could delay or prevent a change of control of our company. Our board of directors has the authority to cause us to issue, without any further vote or action by our stockholders, up to 60,000,000 shares of preferred stock, par value $0.001 per share, in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by our stockholders, even where stockholders are offered a premium for their shares.

          In addition, the issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of our other classes of voting stock either by diluting the voting power of our other classes of voting stock if they vote together as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote even if the action were approved by the holders of our other classes of voting stock.

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          Our incorporation under Delaware law, the ability of our board of directors to create and issue a new series of preferred stock or a stockholder rights plan and certain other provisions that will be contained in our amended and restated certificate of incorporation and amended and restated bylaws could impede a merger, takeover or other business combination involving us or the replacement of our management or discourage a potential investor from making a tender offer for our common stock, which, under certain circumstances, could reduce the market value of our common stock. See "Description of Capital Stock".

Our issuance of preferred stock could adversely affect the market value of our Class A common stock.

          The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our Class A common stock by making an investment in the Class A common stock less attractive. For example, a conversion feature could cause the trading price of our Class A common stock to decline to the conversion price of the preferred stock.

The price of our Class A common stock may fluctuate substantially.

          The initial public offering price for the shares of our Class A common stock sold in this offering will be determined by negotiation between the representatives of the underwriters and us. This price may not reflect the market price of our Class A common stock following this offering. In addition, the market price of our Class A common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including:

    actual or anticipated fluctuations in our results of operations;

    variance in our financial performance from the expectations of market analysts;

    conditions and trends in the markets we serve;

    announcements of significant new products by us or our competitors;

    changes in our pricing policies or the pricing policies of our competitors;

    legislation or regulatory policies, practices, or actions;

    the commencement or outcome of litigation;

    our sale of common stock or other securities in the future, or sales of our common stock by the Sponsors;

    changes in market valuation or earnings of our competitors;

    the trading volume of our Class A common stock;

    changes in the estimation of the future size and growth rate of our markets; and

    general economic conditions.

          In addition, the stock market in general, the NYSE and the market for health and nutritional supplements companies in particular have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. If any of these factors causes us to fail to meet the expectations of securities analysts or investors, or if adverse conditions prevail or are perceived to prevail with respect to our business, the price of our Class A common stock would likely drop significantly.

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We currently do not intend to pay dividends on our common stock after this offering. Consequently, your only opportunity to achieve a return on your investment is if the price of our Class A common stock appreciates.

          We currently do not anticipate paying any cash dividends after this offering and for the foreseeable future. Further, Centers is currently restricted from declaring or paying cash dividends to us pursuant to the terms of the Senior Credit Facility. Under Centers' former senior credit facility, consisting of a $675.0 million term loan facility (the "Old Term Loan Facility") and the $60.0 million senior revolving credit facility (the "Old Revolving Credit Facility" and, together with the Old Term Loan Facility, the "Old Senior Credit Facility"), Centers used exceptions to similar restrictions to make permitted restricted payments to us in August 2009 and March 2010 totaling approximately $42.0 million. See "Dividend Policy" for more information. Consequently, your only opportunity to achieve a return on your investment in our company will be if the market price of our Class A common stock appreciates and you sell your shares at a profit. There is no guarantee that the price of our Class A common stock that will prevail in the market after this offering will ever exceed the price that you pay.

Future sales of our Class A common stock could cause the market price for our Class A common stock to decline.

          Upon consummation of this offering, there will be 87,444,748 shares of our Class A common stock outstanding. All shares of Class A common stock sold in this offering (other than shares of our Class A common stock sold to Jeffrey P. Berger, an individual who will become a member of our board of directors on or prior to the date the registration statement is declared effective (see "Underwriting — Reserved Shares")) will be freely transferable without restriction or further registration under the Securities Act of 1933, as amended (the "Securities Act"). Of the remaining shares of Class A common stock outstanding, 64,944,748 will be restricted securities within the meaning of Rule 144 under the Securities Act, but will be eligible for resale subject to applicable volume, manner of sale, holding period and other limitations of Rule 144. We cannot predict the effect, if any, that market sales of shares of our Class A common stock or the availability of shares of our Class A common stock for sale will have on the market price of our Class A common stock prevailing from time to time. Sales of substantial amounts of shares of our Class A common stock in the public market, or the perception that those sales will occur, could cause the market price of our Class A common stock to decline. After giving effect to this offering, the Sponsors will collectively hold 54,767,565 shares of our Class A common stock and 16,103,245 shares of our Class B common stock, each of which is convertible into one share of Class A common stock, all of which constitute "restricted securities" under the Securities Act. Provided the holders comply with the applicable volume limits and other conditions prescribed in Rule 144 under the Securities Act, all of these restricted securities are currently freely tradable.

          Additionally, as of the consummation of this offering, approximately 9,649,443 shares of our Class A common stock will be issuable upon exercise of stock options that vest and are exercisable at various dates through March 2021, with an average weighted exercise price of $8.30 per share. Of such options, 6,627,436 will be immediately exercisable. As soon as practicable after the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act covering shares of our Class A common stock reserved for issuance under our equity incentive plan. Accordingly, shares of our Class A common stock registered under such registration statement will be available for sale in the open market upon exercise by the holders, subject to vesting restrictions, Rule 144 limitations applicable to our affiliates and the contractual lock-up provisions described below.

          We and certain of our stockholders, directors and officers have agreed to a "lock-up", pursuant to which neither we nor they will sell any shares without the prior consent of the representatives of the underwriters for 180 days after the date of this prospectus, subject to certain

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exceptions and extensions under certain circumstances. Following the expiration of the applicable lock-up period, all these shares of our Class A common stock will be eligible for future sale, subject to the applicable volume, manner of sale, holding period and other limitations of Rule 144. In addition, the Sponsors have certain demand and "piggy-back" registration rights with respect to the Class A common stock that they will retain following this offering. See "Shares Eligible for Future Sale" for a discussion of the shares of Class A common stock that may be sold into the public market in the future, including Class A common stock held by the Sponsors.

As a new investor, you will experience substantial dilution in the net tangible book value of your shares.

          The initial public offering price of our Class A common stock will be considerably more than the net tangible book value per share of our outstanding common stock. Accordingly, investors purchasing shares of Class A common stock from us in this offering will:

    pay a price per share that substantially exceeds the value of our assets after subtracting liabilities; and

    contribute approximately 37% of the total amount invested to fund our company, but will own only approximately 15% of the shares of common stock outstanding after this offering (excluding shares acquired from the selling stockholders) and the use of proceeds from this offering. See "Dilution".

Our dual-class capitalization structure and the conversion features of our Class B common stock may dilute the voting power of the holders of our Class A common stock.

          We have a dual-class capitalization structure, which may pose a significant risk of dilution to our Class A common stockholders. Each share of our Class B common stock, which is not entitled to vote for the election and removal of our directors, is convertible at any time at the option of the Class B holder into one share of Class A common stock, which is entitled to vote for the election and removal of our directors. Conversion of our Class B common stock into Class A common stock would dilute holders of Class A common stock, including holders of shares purchased in this offering, in terms of voting power in connection with the election and removal of our directors.

If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our Class A common stock, then our stock price and trading volume could decline.

          The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts publish about us, our industry and our market. If no analyst elects to cover us and publish research or reports about us, the market for our Class A common stock could be severely limited and our stock price could be adversely affected. In addition, if one or more analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one or more analysts who elect to cover us adversely change their recommendation regarding our unrestricted Class A common stock, our stock price could decline.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

          This prospectus includes forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, and other information that is not historical information. Many of these statements appear, in particular, under the headings "Prospectus Summary", "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations", and "Business". Forward-looking statements can often be identified by the use of terminology such as "subject to", "believe", "anticipate", "plan", "expect", "intend", "estimate", "project", "may", "will", "should", "would", "could", "can", the negatives thereof, variations thereon, and similar expressions, or by discussions of strategy.

          All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and various assumptions. We believe there is a reasonable basis for our expectations and beliefs, but they are inherently uncertain. We may not realize our expectations, and our beliefs may not prove correct. Actual results could differ materially from those described or implied by such forward-looking statements. The following uncertainties and factors, among others (including those set forth under "Risk Factors"), could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements:

    significant competition in our industry;

    unfavorable publicity or consumer perception of our products;

    increases in the cost of borrowings and limitations on availability of additional debt or equity capital;

    our debt levels and restrictions in our debt agreements;

    the incurrence of material product liability and product recall costs;

    loss or retirement of key members of management;

    costs of compliance and our failure to comply with new and existing governmental regulations including, but not limited to, tax regulations;

    costs of litigation and the failure to successfully defend lawsuits and other claims against us;

    the failure of our franchisees to conduct their operations profitably and limitations on our ability to terminate or replace under-performing franchisees;

    economic, political, and other risks associated with our international operations;

    our failure to keep pace with the demands of our customers for new products and services;

    disruptions in our manufacturing system or losses of manufacturing certifications;

    disruptions in our distribution network;

    the lack of long-term experience with human consumption of ingredients in some of our products;

    increases in the frequency and severity of insurance claims, particularly claims for which we are self-insured;

    the failure to adequately protect or enforce our intellectual property rights against competitors;

    changes in raw material costs and pricing of our products;

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    failure to successfully execute our growth strategy, including any delays in our planned future growth, testing and development of our new store formats, any inability to expand our franchise operations or attract new franchisees, or any inability to expand our company-owned retail operations;

    changes in applicable laws relating to our franchise operations;

    damage or interruption to our information systems;

    the impact of current economic conditions on our business;

    natural disasters, unusually adverse weather conditions, pandemic outbreaks, boycotts and geo-political events; and

    our failure to maintain effective internal controls.

          Consequently, forward-looking statements should be regarded solely as our current plans, estimates, and beliefs. You should not place undue reliance on forward-looking statements. We cannot guarantee future results, events, levels of activity, performance, or achievements. We do not undertake and specifically decline any obligation to update, republish, or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

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USE OF PROCEEDS

          We estimate that our net proceeds from this offering will be approximately $237.6 million, based on an assumed initial public offering price of $16.00 per share, the midpoint of the price range set forth on the front cover of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses.

          In connection with the Refinancing, Centers used a portion of the net proceeds from the Term Loan Facility, together with cash on hand, to pay a dividend to Holdings of $185.0 million and to make a contribution to GNC Funding of $85.0 million, which amount GNC Funding then loaned to Holdings. We expect to use such amounts, together with the net proceeds we receive from this offering and cash on hand of $26.0 million, to:

    redeem all of our outstanding shares of Series A preferred stock immediately following completion of this offering at a redemption price per share of $5.00, plus accrued and unpaid dividends through the redemption date, representing an aggregate redemption price of approximately $222.5 million,

    contribute $300.0 million to Centers to repay outstanding borrowings under its Term Loan Facility, and

    apply approximately $11.1 million to satisfy our obligations under the ACOF Management Services Agreement and the Class B common stock.

          Assuming this offering is consummated on March 31, 2011, the accrued and unpaid dividends per share of our Series A preferred stock will be $2.45.

          Ares, OTPP and members of management hold substantially all of our outstanding Series A preferred stock and, therefore, will receive substantially all of the cash paid to redeem such stock. For a description of the shares of our Series A preferred stock held by our affiliates that will be redeemed immediately following the completion of this offering, see "Principal and Selling Stockholders".

          As of the date hereof, the Term Loan Facility bears interest at a rate per annum of 4.25% and will mature in March 2018. Centers used a portion of the net proceeds from such indebtedness to refinance its former indebtedness, to fund amounts to Holdings and to pay related fees and expenses, each as described above. Funds affiliated with Ares hold approximately 10% of the outstanding loans under the Senior Credit Facility and will receive funds representing their pro rata portion of such loans.

          We will not receive any proceeds from the sale of the shares being offered by the selling stockholders.


DIVIDEND POLICY

          We currently do not anticipate paying any cash dividends after this offering and for the foreseeable future. Instead, we anticipate that all of our earnings on our common stock, in the foreseeable future will be used to repay debt, for working capital, to support our operations, and to finance the growth and development of our business. Any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including restrictions in our current and future debt instruments, our future earnings, capital requirements, financial condition, future prospects, and applicable Delaware law, which provides that dividends are only payable out of surplus or current net profits.

          Currently, Centers is restricted from declaring or paying cash dividends to us pursuant to the terms of the Senior Credit Facility. Under the Old Senior Credit Facility, Centers used exceptions to similar restrictions to make permitted restricted payments to us in August 2009 and March 2010

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totaling approximately $42.0 million. These payments were determined to be in compliance with Centers' previously existing debt covenants. In connection with the Refinancing, Centers also used a portion of the net proceeds from the Term Loan Facility and cash on hand to pay a dividend to us in the amount of $185 million. Although the Senior Credit Facility has similar exceptions to the payment of cash dividends as the exceptions provided in the Old Credit Facility, the payment of the $185 million dividend was a specific exception available in connection with the Refinancing.

          OTPP, as the holder of our Class B common stock, is entitled to receive ratably an annual special dividend payment equal to an aggregate amount of $750,000 when, as and if declared by the board of directors, for a period of ten years commencing on March 16, 2007 (the "Special Dividend Period"). The special dividend payment is payable in equal quarterly installments on the first day of each quarter commencing on April 1, 2007.

          Upon the consummation of a change in control transaction or a bona fide initial public offering, OTPP will receive, in lieu of the quarterly special dividend payments, an automatic payment equal to the net present value of the aggregate amount of the special dividend payments that would have been payable to OTPP during the remainder of the Special Dividend Period, calculated in good faith by our board of directors. We expect this amount to be approximately $5.6 million.

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CAPITALIZATION

          The following table sets forth our capitalization as of December 31, 2010 on:

    an actual basis; and

    an as adjusted basis, giving effect to:

    the completion of this offering, including the application of the estimated net proceeds from this offering as described under "Use of Proceeds",

    the completion of the Refinancing, including the application of the net proceeds therefrom as described under "Use of Proceeds" and "Prospectus Summary — Recent Developments",

    prior to the consummation of this offering, the conversion of 12,065,316 shares of Class B common stock into an equal number of shares of Class A common stock, and

    our use of cash on hand to satisfy our obligations under the ACOF Management Services Agreement and our Class B common stock (see "Certain Relationships and Related Transactions — ACOF Management Services Agreement" and "— Special Dividend").

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          The table below should be read in conjunction with "Use of Proceeds", "Selected Consolidated Financial Data", "Unaudited Pro Forma Consolidated Financial Data", "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Description of Capital Stock", "Description of Certain Debt", and our consolidated financial statements and their notes included in this prospectus.

 
  As of December 31, 2010  
 
 
Actual
 
As Adjusted
 
 
   
  (Unaudited)
 
 
  (In millions,
except share data)

 

Cash and cash equivalents

  $ 193.9   $ 6.9  
           

Long-term debt (including current maturities):

             
 

Old Senior Credit Facility

  $ 644.4   $  
 

Senior Credit Facility(1)

        897.2  
 

Mortgage and capital leases

    5.7     5.7  
 

Senior Notes

    298.4      
 

Senior Subordinated Notes

    110.0      
           
   

Total long-term debt

    1,058.5     902.9  
           

Preferred stock, $0.001 par value, 60,000,000 shares authorized:

             
 

Series A, 30,500,005 shares designated, 30,133,615 shares issued, 29,867,046 shares outstanding and 266,569 shares held in treasury, actual; 60,000,000 shares authorized and no shares issued and outstanding, as adjusted

    218.4      

Stockholders' equity:

             

Common stock, $0.001 par value(2):

             
 

Class A, 59,967,949 shares issued, 59,198,688 shares outstanding and 769,261 shares held in treasury, actual; 300,000,000 shares authorized, 88,214,009 shares issued, 87,444,748 shares outstanding and 769,261 shares held in treasury, as adjusted(3)

    0.1     0.1  
 

Class B, 28,168,561 shares issued and outstanding, actual; 30,000,000 shares authorized; 16,103,245 shares issued and outstanding, as adjusted

    0.0     0.0  
 

Paid-in-capital

    451.7     690.5  
 

Retained earnings

    171.2     144.3  
 

Treasury stock

    (2.2 )   (2.2 )
 

Accumulated other comprehensive loss

    (1.3 )   3.5  
           
   

Total stockholders' equity

    619.5     836.2  
           
     

Total capitalization

  $ 1,896.4   $ 1,739.1  
           

(1)
The Senior Credit Facility consists of the Term Loan Facility and the Revolving Credit Facility, which is undrawn. The as adjusted (unaudited) information for the year ended December 31, 2010 gives effect to this offering and the Refinancing.

(2)
With respect to our Class A and Class B common stock, we are authorized to issue 150,000,000 shares collectively at December 31, 2010.

(3)
As Adjusted shares of Class A common stock outstanding reflects the issuance of 16,000,000 shares in this offering, the conversion of 12,065,316 shares of Class B common stock into an equal number of shares of Class A common stock in connection with this offering and the exercise of options for 180,744 shares of Class A common stock, to be sold by selling stockholders in this offering.

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DILUTION

          Purchasers of our Class A common stock in this offering will experience an immediate dilution of net tangible book value per share from the initial public offering price. Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of Class A common stock and the net tangible book value per share immediately after this offering.

          At December 31, 2010, the net tangible book deficit of our common stock was approximately $(603.1) million, or approximately $(6.90) per share of our common stock. Net tangible book value per share represents the amount of our tangible assets reduced by the amount of our total liabilities, divided by the number of shares of our common stock outstanding. After giving effect to the sale of shares of our Class A common stock in this offering at an assumed initial public offering price of $16.00 per share, the midpoint of the price range set forth on the front cover of this prospectus, and after deducting underwriting discounts and commissions and the estimated offering expenses of this offering, our adjusted net tangible book deficit of our common stock would have been $(382.1) million, or approximately $(3.69) per share of our common stock. Our pro forma net tangible book value as of December 31, 2010 was approximately $(382.1) million, or $(3.69) per share of our common stock. Pro forma net tangible book value per share represents the amount of our tangible assets reduced by the amount of our total liabilities, divided by the number of shares of our common stock outstanding, on an as adjusted basis after giving effect to the Refinancing and this offering, including: (1) the issuance and sale of 16,000,000 shares of our Class A common stock at an assumed exercise price of $16.00 per share (the midpoint of the price range set forth on the cover of this prospectus), (2) the redemption of our Series A preferred stock at an aggregate redemption price of approximately $218.4 million, which includes accrued dividends to December 31, 2010, (3) the borrowing of $1.2 billion under the Term Loan Facility, (4) the repayment of $300.0 million of outstanding borrowings under the Term Loan Facility, (5) the repayment of $1.1 billion of indebtedness under the Old Senior Credit Facility, the Senior Notes, and the Senior Subordinated Notes and related accrued interest and fees, (6) the payment of $7.5 million for the termination of interest rate swap arrangements related to the Old Senior Credit Facility, the Series Notes and the Senior Subordinated Notes, and the associated adjustment to interest expense, and (7) the payment of $17.4 million of fees and expenses related to the Refinancing. The number of shares used to calculate pro forma net tangible book value per share includes shares outstanding at December 31, 2010, 16,000,000 shares of our Class A common stock being offered for sale by us in this offering, and 180,744 shares of our Class A common stock to be issued due to the exercise of options and sold by the selling stockholders in connection with this offering. It does not include 6,319,256 shares of our Class A common stock being sold by selling stockholders in this offering. We will not receive any proceeds from the sale of such shares. This represents a net increase in net tangible book value of $3.21 per existing share and an immediate dilution in net tangible book value of $19.69 per share to new stockholders. The following table illustrates this per share dilution to new stockholders:

Assumed initial public offering price per share

        $ 16.00  
 

Net tangible book value per share as of December 31, 2010

  $ (6.90 )      
 

Increase in net tangible book value per share attributable to this offering

  $ 3.21        
             

As adjusted net tangible book value per share after this offering

        $ (3.69 )
             

Dilution in net tangible book value per share to new stockholders

        $ 19.69  
             

          The table below summarizes, on an as adjusted basis as of December 31, 2010, the differences for (1) our existing stockholders, and (2) investors in this offering, with respect to the

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number of shares of common stock purchased from us, the total consideration paid, and the average price per share paid before deducting fees and expenses.

 
  Shares Issued   Total Consideration  
Average
Price per
Share
 
 
 
Number
 
Percentage
 
Amount
 
Percentage
 
 
  (in millions)
   
  (in millions)
   
   
 

Existing stockholders

    87.4 (1)   85 % $ 438.7     63 % $ 5.01  

New stockholders in this offering

    16.0     15 %   256.0     37 %   16.00  
                         
 

Total

    103.4     100 % $ 694.7     100 %      
                         

(1)
Includes 180,744 shares of our Class A common stock to be issued due to the exercise of stock options and sold by the selling stockholders in connection with this offering.

          The foregoing discussion and tables assume no exercise of stock options to purchase 9,649,443 shares of our Class A common stock subject to outstanding stock options with a weighted average exercise price of $8.30 per share upon consummation of this offering and excludes 7,930,000 shares of our Class A common stock available for future grant or issuance under our stock plans. To the extent that any options having an exercise price that is less than the offering price of this offering are exercised, new investors will experience further dilution.

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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

          The unaudited pro forma consolidated statement of operations for the year ended December 31, 2010 gives effect to this offering and the Refinancing as if they had been consummated on January 1, 2010. The unaudited pro forma consolidated balance sheet as of December 31, 2010 gives effect to this offering and the Refinancing as if they had been consummated on such date. The unaudited pro forma consolidated financial data gives effect to: (1) the issuance and sale of 16,000,000 shares of our Class A common stock at an assumed offering price of $16.00 per share (the midpoint of the price range set forth on the cover of this prospectus) resulting in net proceeds to us of approximately $237.6 million (after deducting estimated underwriting discounts and commissions and estimated offering expenses of $18.4 million), (2) the redemption of our Series A preferred stock at an aggregate redemption price of approximately $218.4 million, which includes accumulated dividends, and (3) the repayment of $300.0 million of outstanding balances under the Term Loan Facility. Additionally, the unaudited pro forma consolidated financial data gives effect to: (1) the borrowing of $1.2 billion under the Term Loan Facility, (2) the repayment of $1.1 billion of the Old Senior Credit Facility, the Senior Notes, and the Senior Subordinated Notes and related accrued interest and fees, (3) the payment of $7.5 million for the termination of interest rate swap arrangements related to the prior indebtedness, and the associated adjustment to interest expense, and (4) the payment of $17.4 million of fees and expenses related to the Refinancing.

          The unaudited pro forma consolidated financial data does not purport to represent what our results of operations would have been if this offering and the Refinancing had occurred as of the dates indicated, nor are they indicative of results for any future periods.

          The unaudited pro forma consolidated statement of operations does not present the effect of non-recurring charges resulting from this offering and the Refinancing as a result of: (1) the write off of deferred financing fees of $14.1 million and the original issue discount of $1.6 million associated with the Old Senior Credit Facility, the Senior Notes, and the Senior Subordinated Notes, (2) the settlement of the interest rate swap agreements of $7.5 million, (3) the write off of deferred financing fees of $4.2 million associated with the $300.0 million repayment of borrowings under the Term Loan Facility, and (4) the payment to the Sponsors of approximately $11.1 million to settle obligations under the ACOF Management Services Agreement and our Class B common stock.

          The unaudited pro forma consolidated financial data is presented for informational purposes only and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical consolidated financial statements and accompanying notes included in this prospectus.

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GNC ACQUISITION HOLDINGS INC. AND SUBSIDIARIES

Unaudited Pro Forma Consolidated Statement of Operations

For the year ended December 31, 2010

 
  Historical   Adjustments   As Adjusted  
 
  (In thousands, except per share data)
 

Revenue

  $ 1,822,168   $   $ 1,822,168  

Cost of sales, including costs of warehousing, distribution and occupancy

    1,179,886         1,179,886  
               

Gross profit

    642,282         642,282  

Compensation and related benefits

    273,797         273,797  

Advertising and promotion

    51,707         51,707  

Other selling, general and administrative

    100,687         100,687  

Foreign currency (gain) loss

    (296 )       (296 )

Strategic alternative costs

    3,981         3,981  
               

Operating income

    212,406         212,406  

Interest expense, net

    65,376     (24,412 )(a)   40,964  
               

Income before income taxes

    147,030     24,412     171,442  

Income tax expense

    50,463     9,032  (b)   59,495  
               

Net income

  $ 96,567   $ 15,380   $ 111,947  
               

Income per share — Basic and Diluted:

                   

Net income

  $ 96,567   $ 15,380   $ 111,947  

Preferred stock dividends

    (20,606 )   20,606  (c)    
               

Net income available to common stockholders

  $ 75,961   $ 35,986   $ 111,947  
               

Earnings per share:

                   
 

Basic

  $ 0.87         $ 1.08  
 

Diluted

  $ 0.85         $ 1.06  

Weighted average common shares outstanding

                   
 

Basic

    87,339     16,181  (d)   103,520  
 

Diluted

    88,917     16,767  (d)   105,684  

(a)
Reflects adjustments to interest expense as a result of the Refinancing. Outstanding borrowings under the Senior Credit Facility currently accrue interest based on the LIBO rate and the Senior Credit Facility has an interest rate floor of 1.25%. A 1/8% change in interest rates would not have a material effect on the Company until the current LIBO rate of approximately 0.25% increases substantially.

 
  Historical   Adjustments   As Adjusted  

Interest Expense:

                   

Old Senior Credit Facility

  $ 29,630   $ (29,630 ) $  

Senior Notes

    19,440     (19,440 )    

Senior Subordinated Notes

    11,825     (11,825 )    

Deferred financing fees

    4,282     (2,405 )   1,877  

Original issue discount

    412     (4 )   408  

Gustine mortgage

    445         445  

Interest income

    (658 )       (658 )

Term Loan Facility

        38,892  (i)   38,892  
               

Total Interest Expense

  $ 65,376   $ (24,412 ) $ 40,964  
               

    (i)
    Interest expense on the Term Loan Facility calculated on $900.0 million of outstanding borrowings at an initial rate of 4.25% (representing an applicable margin of 3% plus the interest rate floor of 1.25%), $8.8 million utilized under the Revolving Credit Facility for letters of credit at an initial rate of 3.25%, and an initial rate of 0.5% on the unused portion of the Revolving Credit Facility.

(b)
Reflects pro forma tax effect of above adjustments at an estimated effective tax rate of 37.0%

(c)
Reflects the redemption of our Series A preferred stock from the net proceeds of this offering.

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(d)
Represents the issuance of our Class A common stock in this offering. A reconciliation of shares used in the earnings per share calculation is as follows:

 
  Basic   Diluted  

Historical weighted average shares outstanding at December 31, 2010

    87,339     88,917  

Shares issued in this offering

    16,000     16,000  

Stock options exercised for shares to be sold by selling stockholders in this offering

    181     181  

Increase in shares due to the effect of dilutive employee stock options, based upon the weighted average fair value at December 31, 2010 of $9.89 per share and As Adjusted weighted average fair value of $16.00 per share. 

        586  
           

As Adjusted weighted average shares outstanding for the year ended December 31, 2010

    103,520     105,684  
           

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GNC ACQUISITION HOLDINGS INC. AND SUBSIDIARIES

Unaudited Pro Forma Consolidated Balance Sheet
As of December 31, 2010

 
  Historical   Adjustments   As Adjusted  
 
  (in thousands)
 

Current Assets:

                   
 

Cash and cash equivalents

  $ 193,902   $ (187,017 )(a) $ 6,885  
 

Receivables

    102,874         102,874  
 

Inventories

    381,949         381,949  
 

Prepaids and other current assets

    40,569     11,627  (b)   52,196  
               
   

Total current assets

    719,294     (175,390 )   543,904  

Long-term assets:

                   
 

Goodwill

    625,241           625,241  
 

Brands

    720,000         720,000  
 

Other intangible assets, net

    147,224         147,224  
 

Property, plant and equipment, net

    193,428         193,428  
 

Deferred financing fees, net

    14,129     (989 )(c)   13,140  
 

Other long-term assets

    5,767         5,767  
               
   

Total long-term assets

    1,705,789     (989 )   1,704,800  
               
     

Total assets

  $ 2,425,083   $ (176,379 ) $ 2,248,704  
               

Current liabilities:

                   
 

Accounts payable

  $ 98,662   $   $ 98,662  
 

Accrued payroll and related liabilities

    25,656         25,656  
 

Accrued interest

    13,372     (13,372 )(d)    
 

Current portion, long-term debt

    28,070     (26,478 )(e)   1,592  
 

Deferred revenue and other current liabilities

    69,065     (4,395 )(f)   64,670  
               
   

Total current liabilities

    234,825     (44,245 )   190,580  

Long-term liabilities:

                   

Long-term debt

    1,030,429     (129,125 )(e)   901,304  

Deferred tax liabilities, net

    288,015     1,700  (g)   289,715  

Other long-term liabilities

    33,950     (3,074 )(f)   30,876  
               
   

Total long-term liabilities

    1,352,394     (130,499 )   1,221,895  
               
     

Total liabilities

    1,587,219     (174,744 )   1,412,475  

Preferred stock, $0.001 par value, 60,000 shares authorized:

                   
 

Series A, 30,500 shares designated, 30,134 shares issued, 29,867 shares outstanding and 267 shares held in treasury at December 31, 2010, and no shares designated, issued, outstanding or held in treasury, as adjusted

    218,381     (218,381 )(h)    

Stockholders' Equity:

                   
 

Common stock, $0.001 par value, 150,000 shares authorized:

                   
   

Class A, 59,968 shares issued and 59,199 shares outstanding and 769 shares held in treasury at December 31, 2010, and 88,214 shares issued, 87,445 shares outstanding, and 769 shares held in treasury as adjusted(i)

    60     27  (j)   87  
   

Class B, 28,169 shares issued and outstanding at December 31, 2010, and 16,103 shares issued and outstanding as adjusted

    28     (12 )(j)   16  

Paid-in-capital

    451,728     238,829  (j)   690,557  

Retained earnings

    171,224     (26,848 )(k)   144,376  

Treasury stock, at cost

    (2,277 )       (2,277 )

Accumulated other comprehensive loss

    (1,280 )   4,750  (f)   3,470  
               
   

Total stockholders' equity

    619,483     216,746     836,229  
               
     

Total liabilities and stockholders' equity

  $ 2,425,083   $ (176,379 ) $ 2,248,704  
               

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(a)
Reflects adjustments made to cash for the following:

Due to this offering:

             

Proceeds from this offering

  $ 256,000        

Proceeds from 180,744 options exercised at an average exercise price of $6.66 per share in connection with this offering

    1,204        

Less: estimated fees and expenses related to the offering

    (18,360 )      

Less: payment to Sponsors to settle obligations under the ACOF Management Services Agreement and Class B common stock

    (11,112 )      

Less: redemption of Series A preferred stock

    (218,381 )      

Less: repayment of Term Loan Facility

    (300,000 )      
             
 

Sub-total due to the offering

    (290,649 )      

Due to the Refinancing:

             

Proceeds from the Refinancing, net of $3.8 million of original issue discount

    1,196,200        

Repayment of the Old Senior Credit Facility, the Senior Notes and the Senior Subordinated Notes

    (1,054,381 )      

Payment due to termination of interest rate swap agreements

    (7,469 )      

Deferred financing fees related to the Refinancing

    (17,346 )      

Payment of accrued interest due to the Refinancing

    (13,372 )      
             
 

Sub-total due to the Refinancing

    103,632        
             

Total cash effect

  $ (187,017 )      
             

(b)    Reflects adjustments made to prepaids and other current assets to record income tax benefits arising from the Refinancing and this offering for the following:

 

Due to the Refinancing:

             

Record current income tax benefit from the write off of unamortized deferred financing fees and original issue discount associated with the Old Senior Credit Facility, the Senior Notes and the Senior Subordinated Notes

  $ 5,830        

Record current income tax benefit on loss from terminated interest rate swap agreements

    2,764        

Write off of current portion deferred tax asset due to terminated interest rate swap arrangements

    (1,600 )      
             
 

Sub-total due to the Refinancing

    6,994        

Due to the offering:

             

Record current income tax benefit of payments to Sponsors to settle obligations under the ACOF Management Services Agreement and Class B common stock

    2,056        

Record current income tax benefit of exercised stock options

    669        

Record current income tax benefit related to write off of deferred financing fees due to prepayment of $300.0 million of the Term Loan Facility

    1,908        
             
 

Sub-total due to this offering

    4,633        
             

Total prepaids and other current assets effect

  $ 11,627        
             

(c)    Reflects adjustments made to deferred financing fees:

 

Due to the Refinancing:

             

New fees related to the Senior Credit Facility

  $ 17,346        

Write off of fees related to the Old Senior Credit Facility, the Senior Notes and the Senior Subordinated Notes

    (14,129 )      
             
 

Sub-total due to the Refinancing

    3,217        

Due to the offering:

             

Write off of fees related to prepayment of $300.0 million of the Term Loan Facility

    (4,206 )      
             
 

Sub-total due to this offering

    (4,206 )      
             

Total deferred financing fee effect

  $ (989 )      
             

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(d)    Reflects adjustments to accrued interest due to the Refinancing.

 

(e)    Reflects adjustments to long-term debt in connection with the Refinancing:

 

 
  Current Portion   Long Term  

Record current portion of the Senior Credit Facility

  $ 9,000   $ 1,187,200  

Repayment of current portion of Old Senior Credit Facility

    (26,478 )   (1,026,275 )

Repayment of the Term Loan Facility in connection with this offering

    (9,000 )   (291,000 )

Write off original issue discount for repayment of the Term Loan Facility

        950  
           

Total debt effect

  $ (26,478 ) $ (129,125 )
           

(f)    Reflects adjustments due to Refinancing related to settlement of interest rate swap arrangements:

 

Current portion of interest rate swap arrangements

  $ (4,395 )      

Long-term portion of interest rate swap arrangements

    (3,074 )      
             

Total adjustments due to settlement of swap arrangements

    (7,469 )      

Tax effect at 36.4% effective tax rate

    (2,719 )      
             

Total accumulated other comprehensive income effect

  $ (4,750 )      
             

(g)    Reflects adjustments to net long-term deferred tax liabilities related to the Refinancing:

 

Write off of long-term portion deferred tax asset due to terminated interest rate swap arrangements

  $ 1,119        

Adjustment to deferred tax asset due to non cash stock compensation expense

  $ 581        
             

Total deferred tax liabilities adjustment

  $ 1,700        
             

(h)    Reflects the redemption of our Series A preferred stock in an aggregate liquidation preference, including accrued and unpaid dividends, as of December 31, 2010 of $218.4 million.

 

(i)    As Adjusted shares of Class A common stock outstanding reflects the issuance of 16,000,000 shares in this offering, the conversion of 12,065,316 shares of Class B common stock into an equal number of shares of Class A common stock in connection with this offering and the exercise of stock options for 180,744 shares of Class A common stock to be sold by selling stockholders in this offering.

 

(j)    Reflects the sale by us of 16,000,000 shares of our Class A common stock offered hereby at an assumed initial public offering price of $16.00 per share (the midpoint of the price range set forth on the cover of this prospectus), and the conversion of 12,065,316 shares of Class B common stock into an equal number of shares of Class A common stock and the application of the net proceeds to us from this offering, after deducting estimated offering expenses payable by us.

 

(k)    Reflects adjustments to retained earnings:

 

 
  Pre-tax amount   Tax   Net of Tax  

Write off of unamortized deferred financing fees and original issue discount related to the Old Senior Credit Facility, the Senior Notes, and the Senior Subordinated Notes

    (14,129 )   5,228     (8,901 )

Write off of original issue discount on the Senior Notes

    (1,629 )   603     (1,026 )

Write off of deferred financing fees associated with prepayment of $300.0 million of Term Loan Facility

    (4,206 )   1,556     (2,650 )

Tax benefit of exercised stock options

        88     88  

Payment to Sponsors to settle obligations under the ACOF Management Services Agreement and Class B common stock

    (11,112 )   2,056     (9,056 )

Write off original issue discount for repayment of the Senior Credit Facility

    (950 )   352     (598 )

Loss recognized upon termination of interest rate swap agreements

    (7,469 )   2,764     (4,705 )
               

Total adjustments to retained earnings

  $ (39,495 ) $ 12,647   $ (26,848 )
               

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SELECTED CONSOLIDATED FINANCIAL DATA

          The selected consolidated financial data presented below as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 are derived from our audited consolidated financial statements and footnotes included in this prospectus. The selected consolidated financial data presented below as of December 31, 2007 and 2006, and for the periods from March 16, 2007 to December 31, 2007 (the "2007 Successor Period" and, collectively with the years ended December 31, 2010, 2009 and 2008, the "Successor Periods") and from January 1, 2007 to March 15, 2007, and for the year ended December 31, 2006, are derived from our audited consolidated financial statements and footnotes, which are not included in this prospectus. The selected consolidated financial data as of December 31, 2006 and for the period January 1, 2007 to March 15, 2007 and for the year ended December 31, 2006 represent the period during which GNC Parent Corporation was owned by an investment fund managed by Apollo Management V, L.P. ("Apollo").

          Together with our wholly owned subsidiary GNC Acquisition Inc., we entered into the Merger Agreement with GNC Parent Corporation on February 8, 2007. On March 16, 2007, the Merger was consummated. As a result of the Merger, the consolidated statement of operations for the Successor Periods includes the following: interest and amortization expense resulting from the issuance of the Senior Floating Rate Toggle Notes due 2014 (the "Senior Notes"), the 10.75% Senior Subordinated Notes due 2015 (the "Senior Subordinated Notes") and the Old Senior Credit Facility; and amortization of intangible assets related to the Merger. Further, as a result of purchase accounting, the fair values of our assets on the date of the Merger became their new cost basis.

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          You should read the following financial information together with the information under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and their related notes.

 
  Successor    
  Predecessor  
 
 
Year Ended
December 31,
2010
 
Year Ended
December 31,
2009
 
Year Ended
December 31,
2008
 
March 16-
December 31,
2007
   
 
January 1-
March 15,
2007
 
Year Ended
December 31,
2006
 
 
   
   
  (Dollars in millions,
except share data)

   
   
   
 

Statement of Operations Data:

                                         

Revenue:

                                         
 

Retail

  $ 1,344.4   $ 1,256.3   $ 1,219.3   $ 909.3       $ 259.3   $ 1,122.7  
 

Franchising

    293.6     264.2     258.0     193.9         47.2     232.3  
 

Manufacturing/Wholesale

    184.2     186.5     179.4     119.8         23.3     132.1  
                               

Total revenue

  $ 1,822.2   $ 1,707.0   $ 1,656.7   $ 1,223.0       $ 329.8   $ 1,487.1  

Cost of sales, including costs of warehousing and distribution, and occupancy

    1,179.9     1,116.4     1,082.6     814.2         212.2     983.5  
                               

Gross profit

    642.3     590.6     574.1     408.8         117.6     503.6  

Compensation and related benefits

    273.8     263.0     249.8     195.8         64.3     260.8  

Advertising and promotion

    51.7     50.0     55.1     35.0         20.5     50.7  

Other selling, general, and administrative

    100.7     96.7     98.9     71.5         17.6     94.9  

Other (income) expense(1)

    (0.3 )   (0.1 )   0.7     (0.4 )       (0.2 )   0.5  

Strategic alternative costs

    4.0                          

Merger related costs

                        34.6      
                               

Operating income (loss)

    212.4     181.0     169.6     106.9         (19.2 )   96.7  

Interest expense, net

    65.4     69.9     83.0     75.5         72.8     45.6  
                               

Income (loss) before income taxes

    147.0     111.1     86.6     31.4         (92.0 )   51.1  

Income tax expense (benefit)

    50.4     41.6     32.0     12.6         (21.6 )   19.3  
                               

Net income (loss)

  $ 96.6   $ 69.5   $ 54.6   $ 18.8       $ (70.4 ) $ 31.8  
                               

Weighted average shares outstanding:

                                         
 

Basic

    87,339     87,421     87,761     87,784         50,607     50,532  
 

Diluted

    88,917     87,859     87,787     87,784         50,607     52,176  

Net income (loss) per share(2):

                                         
 

Basic

  $ 0.87   $ 0.58   $ 0.43   $ 0.08       $ (1.39 ) $ 0.34  
 

Diluted

  $ 0.85   $ 0.58   $ 0.43   $ 0.08       $ (1.39 ) $ 0.32  
                               

Balance Sheet Data (at end of period):

                                         

Cash and cash equivalents

  $ 193.9   $ 89.9   $ 44.3   $ 28.9             $ 25.6  

Working capital(3)

    484.5     397.0     306.8     258.1               250.0  

Total assets

    2,425.1     2,319.6     2,293.8     2,239.6               981.7  

Total current and non-current long-term debt

    1,058.5     1,059.8     1,084.7     1,087.0               857.9  

Preferred stock

    218.4     197.7     179.3     162.2                

Total stockholders' equity

    619.5     534.2     474.5     446.4               (99.0 )

Statement of Cash Flows:

                                         

Net cash provided by (used in) operating activities

  $ 141.5   $ 114.0   $ 77.4   $ 92.0       $ (67.5 ) $ 73.9  

Net cash used in investing activities

    (36.1 )   (42.2 )   (60.4 )   (1,672.2 )       (6.2 )   (23.4 )

Net cash (used in) provided by financing activities

    (1.5 )   (26.4 )   (1.4 )   1,598.7         58.7     (111.0 )

Other Data:

                                         

EBITDA(4)

  $ 259.4   $ 227.7   $ 212.1   $ 136.9       $ (11.8 ) $ 135.9  

Capital expenditures(5)

    32.5     28.7     48.7     28.9         5.7     23.8  

(1)
Other (income) expense includes foreign currency (gain) loss for all periods presented. Other (income) expense for the year ended December 31, 2006 includes a $1.2 million loss on the sale of our Australian manufacturing facility.

(2)
Includes impact of dividends on our Series A preferred stock.

(3)
Working capital represents current assets less current liabilities.

(4)
We define EBITDA as net income before interest expense (net), income tax expense, depreciation and amortization. Management uses EBITDA as a tool to measure operating performance of the business. EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income, or any other performance measures derived in accordance with GAAP, or as an alternative to GAAP cash flow from operating activities, as a measure of our profitability or liquidity.

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    The following table reconciles EBITDA to net income (loss) as determined in accordance with GAAP for the periods indicated:

 
  Successor    
  Predecessor  
 
 
Year Ended
December 31,
2010
 
Year Ended
December 31,
2009
 
Year Ended
December 31,
2008
 
March 16-
December 31,
2007
   
 
January 1-
March 15,
2007
 
Year Ended
December 31,
2006
 
 
   
  (dollars in millions)
   
   
   
   
 

Net income (loss)

  $ 96.6   $ 69.5   $ 54.6   $ 18.8       $ (70.4 ) $ 31.8  

Interest expense, net

    65.4     69.9     83.0     75.5         72.8     45.6  

Income tax expense (benefit)

    50.4     41.6     32.0     12.6         (21.6 )   19.3  

Depreciation and amortization

    47.0     46.7     42.5     30.0         7.4     39.2  
                               

EBITDA

  $ 259.4 (a) $ 227.7 (b) $ 212.1 (b) $ 136.9 (b)     $ (11.8 )(c) $ 135.9 (d)
                               

    (a)
    For the year ended December 31, 2010, EBITDA includes the following expenses: $1.5 million related to payments to the Sponsors under the ACOF Management Services Agreement and Class B common stock, which payments will cease following this offering, and $4.0 million of non-recurring expenses principally related to the exploration of strategic alternatives.

    (b)
    For the years ended December 31, 2010, 2009 and 2008, and the 2007 Successor Period, EBITDA includes $1.5 million, $1.5 million, $1.5 million and $1.2 million, respectively, related to payments to the Sponsors under the ACOF Management Services Agreement and Class B common stock, which payments will cease following this offering.

    (c)
    For the period January 1, 2007 to March 15, 2007, EBITDA includes $34.6 million of Merger related costs and $0.4 million related to payments to our prior sponsors for management fees.

    (d)
    For the year ended December 31, 2006, EBITDA includes $1.5 million related to payments to our prior sponsors for management fees.

(5)
Capital expenditures for the year ended December 31, 2008 include approximately $10.1 million incurred in conjunction with our store register upgrade program.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          You should read the following discussion in conjunction with "Selected Consolidated Financial Data" and our consolidated financial statements and the related notes thereto. The discussion in this section contains forward-looking statements that involve risks and uncertainties. See "Risk Factors" included in this prospectus for a discussion of important factors that could cause actual results to differ materially from those described or implied by the forward-looking statements contained herein. We urge you to review the information set forth in "Special Note Regarding Forward-Looking Statements" and "Risk Factors" included in this prospectus.

Business Overview

          We are a global specialty retailer of nutritional supplements, which include VMHS, sports nutrition products, diet products, and other wellness products. We derive our revenues principally from product sales through our company-owned stores and online through GNC.com, franchise activities, and sales of products manufactured in our facilities to third parties. We sell products through a worldwide network of more than 7,200 locations operating under the GNC brand name.

Revenues and Operating Performance from our Segments

          We measure our operating performance primarily through revenues and operating income from our three segments, Retail, Franchise, and Manufacturing/Wholesale, and through the management of unallocated costs from our warehousing, distribution and corporate segments, as follows:

    Retail:    Retail revenues are generated by sales to consumers at our company-owned stores and online through GNC.com. Although we believe that our retail and franchise businesses are not seasonal in nature, historically we have experienced, and expect to continue to experience, a variation in our net sales and operating results from quarter to quarter, with the first half of the year being stronger than the second half of the year. According to Nutrition Business Journal's Supplement Business Report 2010, our industry is expected to grow at an annual average rate of approximately 5.3% through 2015. As a leader in our industry, we expect our organic retail revenue growth to be consistent with projected industry growth as a result of our disproportionate market share, scale economies in purchasing and advertising, strong brand awareness and vertical integration.

    Franchise:    Franchise revenues are generated primarily from:

    (1)
    product sales to our franchisees;

    (2)
    royalties on franchise retail sales; and

    (3)
    franchise fees, which are charged for initial franchise awards, renewals, and transfers of franchises.

          As described above, our industry is expected to grow at an annual average rate of approximately 5.3% through 2015. Although we do not anticipate the number of our domestic franchise stores to grow substantially, we expect to achieve domestic franchise store revenue growth consistent with projected industry growth, which will be generated by royalties on franchise retail sales and product sales to our existing franchisees. As a result of our efforts to expand our international presence and provisions in our international franchising agreements requiring franchisees to open additional stores, we have increased our international store base in recent periods and expect to continue to increase the number of our international franchise stores over the next five years. We believe this will result in additional franchise fees associated with new store openings and increased revenues from product sales to, and royalties from, new franchisees. As

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our existing international franchisees continue to open additional stores, we also anticipate that franchise revenue from international operations will be driven by increased product sales to, and royalties from, our franchisees. Since our international franchisees pay royalties to us in U.S. dollars, any strengthening of the U.S. dollar relative to our franchisees' local currency may offset some of the growth in royalty revenue.

    Manufacturing/Wholesale:    Manufacturing/Wholesale revenues are generated through sales of manufactured products to third parties, generally for third-party private label brands, and the sale of our proprietary and third-party products to and through Rite Aid and www.drugstore.com, and the sale of our proprietary products to and through PetSmart. License fee revenue from the opening of GNC franchise store-within-a-store locations within Rite Aid stores is also recorded in this segment. Our revenues generated by our manufacturing and wholesale operations are subject to our available manufacturing capacity.

          A significant portion of our business infrastructure is comprised of fixed operating costs. Our vertically-integrated distribution network and manufacturing capacity can support higher sales volume without significant incremental costs. We therefore expect our operating expenses to grow at a lesser rate than our revenues, resulting in positive operating leverage.

          The following trends and uncertainties in our industry could affect our operating performance as follows:

    broader consumer awareness of health and wellness issues and rising healthcare costs may increase the use of the products we offer and positively affect our operating performance;

    interest in, and demand for, condition-specific products based on scientific research may positively affect our operating performance if we can timely develop and offer such condition-specific products;

    the effects of favorable and unfavorable publicity on consumer demand with respect to the products we offer may have similarly favorable or unfavorable effects on our operating performance;

    a lack of long-term experience with human consumption of ingredients in some of our products could create uncertainties with respect to the health risks, if any, related to the consumption of such ingredients and negatively affect our operating performance;

    increased costs associated with complying with new and existing governmental regulation may negatively affect our operating performance; and

    a decline in disposable income available to consumers may lead to a reduction in consumer spending and negatively affect our operating performance.

Executive Overview

          Our recent results of operations reflect steady growth, including through a difficult economic environment and despite a short-term reduction in revenue that we experienced in 2009 due to the Hydroxycut recall. For the year ended December 31, 2010, we achieved revenue growth of 6.7%, operating income growth of 17.1% and net income growth of 38.9% compared to the same period in 2009. Operating income growth resulted from higher sales and margins in our retail and franchise segments and effective cost controls on unallocated expenses. Net income growth resulted primarily from higher operating income, lower interest expense, and a lower effective tax rate.

          Recent revenue growth in our domestic retail segment has been driven primarily by increases in the sports nutrition category resulting from new product introductions. In addition, we have

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experienced significant growth in our GNC.com business primarily as a result of our redesigned website. Our domestic retail comparable store sales increased 5.6% in 2010 compared to 2009. This includes an increase of 26.2% in our GNC.com business. In recent periods, our domestic franchise business has achieved increased product sales despite a lower store base. Sales in the international franchise business have grown steadily as a result of an increased store base and strong organic sales growth.

          Our manufacturing strategy is designed to provide our stores with proprietary products at the lowest possible cost, and utilize additional capacity to promote production efficiencies and enhance our position in the third-party contract business. Under this strategy, our third-party manufacturing sales increased by 38.7% and 3.8% in 2008 and 2009, respectively, over the prior year periods. For the year ended December 31, 2010, our manufacturing segment experienced reduced sales in contract manufacturing compared to 2009, partially offset by higher product sales to Rite Aid, drugstore.com and PetSmart. The reduction in the contract manufacturing business reflects a transition period during which we are moving from low margin commodity contracts to higher margin, specialty product contracts.

          We also continue to invest in opportunities to expand our brand beyond our existing domestic company-owned footprint and partner with companies like PepsiCo and PetSmart to develop new and innovative products. We believe that these ventures, together with our direct investments in international markets like China, represent attractive growth opportunities. For the year ended December 31, 2010, we incurred $4.7 million of start-up expenses related to our operations in China and agreements with PepsiCo, in connection with the development of a new brand of fortified coconut water called Phenom, and with PetSmart, in connection with the development, manufacture and distribution of nutritional supplements for pets. Additionally, for the year ended December 31, 2010, we made payments in an aggregate amount of $1.5 million to the Sponsors related to the management fee and the special dividend payments on our Class B common stock, which payments will cease following the completion of this offering, and incurred $4.0 million of non-recurring expenses principally related to the exploration of strategic alternatives.

Determination of the Fair Value of our Class A Common Stock on Grant Date

          In 2010, we granted options to purchase up to 680,000 shares of our Class A common stock pursuant to the GNC Acquisition Holdings Inc. 2007 Stock Incentive Plan (the "2007 Stock Plan"). Such options were granted with exercise prices equal to or greater than the fair value of our Class A common stock on each of the following grant dates: February 4, 2010, March 24, 2010, May 13, 2010 and July 14, 2010 (the "2010 grant dates"). As we are a private company with no public market for our Class A common stock, we determined the fair value using a contemporaneous valuation consistent with the American Institute of Certified Public Accountants Practice Aid, "Valuation of Privately-Held Company Equity Securities Issued as Compensation" (the "Practice Aid"). In conducting this valuation, we considered all objective and subjective factors that we believed to be relevant, including our best estimate of our business condition, prospects and operating performance at each 2010 grant date. Within this contemporaneous valuation performed by us, a range of factors, assumptions and methodologies were used. The significant factors included:

    our historical operating results, including the growth of our revenue and the prospects of our business;

    the lack of a public market for our Class A common stock;

    the likelihood of achieving a liquidity event, such as an initial public offering or sale given prevailing market conditions and the nature and history of our business;

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    valuations of comparable public companies; and

    the condition of and outlook for the nutritional supplements industry.

          For the contemporaneous valuation of our Class A common stock, management estimated, as of each 2010 grant date, our enterprise value on a continuing operations basis, primarily using the market approach, which is an acceptable valuation method in accordance with the Practice Aid. The market approach utilized the market multiple methodology based on comparable public companies' equity pricing, as detailed below.

          For the market multiple methodology, we determined, as of each 2010 grant date, a range of trading multiples for a group of comparable public companies, based on trailing 12 months adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"). These multiples were then applied to our actual trailing 12 months adjusted EBITDA as of each 2010 grant date. When selecting comparable companies, consideration was given to industry similarity, and their specific products offered, financial data availability and capital structure. After determining the gross fair values of our Class A common stock as of each 2010 grant date, we applied a discount to reflect the lack of liquidity of our Class A common stock. The applicable discount rate was 26% for the grants made on February 4, 2010, March 24, 2010 and May 13, 2010, and was 5% for the grants made on July 14, 2010. The change in the applicable discount rate from May 13 to July 14 was a result of the likelihood and timing of a liquidity event.

          We believe that the procedures employed in the market multiple methodology are reasonable and consistent with the Practice Aid. As a result of such beliefs, we chose not to obtain a contemporaneous valuation by an unrelated valuation specialist at each grant date.

          The following table summarizes our stock option grants in 2010, the exercise prices of such grants, and the fair value of our Class A common stock associated with such grants, as determined by management, as of each grant date:

Grant Date
  Number of Shares
Subject to
Options Granted
  Exercise Price
Per Share
  Fair Value Per Share
of Common Stock
 

February 4, 2010

    25,000   $ 8.79   $ 6.50  

February 4, 2010

    25,000     13.18     6.50  

March 24, 2010

    102,500     10.09     7.47  

March 24, 2010

    102,500     15.13     7.47  

May 13, 2010

    125,000     10.09     7.47  

July 14, 2010

    150,000     11.09     10.54  

July 14, 2010

    150,000     16.63     10.54  

          The significant factors contributing to the increase in fair value of our Class A common stock during the most recent fiscal year and the difference between the estimated initial public offering price and the fair value of our Class A common stock used in estimating the fair value of stock options granted during the most recent fiscal year include the following:

    improved general economic conditions;

    continued growth of our revenue and improved operating results;

    ongoing expansion of our business and operations;

    greater clarity regarding the likelihood and timing of a liquidity event;

    our expectation for ongoing improvement of our financial performance; and

    improved condition of and outlook for the nutritional supplements industry.

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          Our assumed initial public offering price of $16.00 per share, the midpoint of the price range set forth on the cover of this prospectus, represents an increase of $5.46, or approximately 52%, compared to the fair value of our Class A common stock as of the date of the option grants made on July 14, 2010. The increase was primarily the result of the following factors:

    the removal of the discount rate as a result of the immediate liquidity available to investors upon consummation of this offering;

    the expected increase in earnings per share as a result of this offering;

    continued growth of our revenue and improved operating results in the second half of 2010 compared to the same period in 2009; and

    the ongoing expansion of our business and operations.

Basis of Presentation

          The accompanying consolidated financial statements and footnotes have been prepared by us in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and with the instructions to Regulation S-K and Regulation S-X. Our normal reporting period is based on a calendar year.

Results of Operations

          The following information presented as of December 31, 2010, 2009 and 2008 was derived from our audited consolidated financial statements and accompanying notes which are included in this prospectus.

          The following information may contain financial measures other than in accordance with generally accepted accounting principles, and should not be considered in isolation from or as a substitute for our historical consolidated financial statements. In addition, the adjusted combined operating results may not reflect the actual results we would have achieved absent the adjustments and may not be predictive of future results of operations. We present this information because we use it to monitor and evaluate our ongoing operating results and trends, and believe it provides investors with an understanding of our operating performance over comparative periods.

          As discussed in Note 20, "Segments", to our consolidated financial statements, we evaluate segment operating results based on several indicators. The primary key performance indicators are revenues and operating income or loss for each segment. Revenues and operating income or loss, as evaluated by management, exclude certain items that are managed at the consolidated level, such as warehousing and transportation costs, impairments, and other corporate costs. The following discussion compares the revenues and the operating income or loss by segment, as well as those items excluded from the segment totals.

          Same store sales growth reflects the percentage change in same store sales in the period presented compared to the prior year period. Same store sales are calculated on a daily basis for each store and exclude the net sales of a store for any period if the store was not open during the same period of the prior year. We also include our internet sales, as generated through GNC.com and www.drugstore.com, in our domestic company-owned same store sales calculation. When a store's square footage has been changed as a result of reconfiguration or relocation in the same mall or shopping center, the store continues to be treated as a same store. If, during the period presented, a store was closed, relocated to a different mall or shopping center, or converted to a franchise store or a company-owned store, sales from that store up to and including the closing day or the day immediately preceding the relocation or conversion are included as same store sales as long as the store was open during the same period of the prior year. We exclude from the calculation sales during the period presented that occurred on or after the date of relocation to a different mall or shopping center or the date of a conversion.

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  Year Ended
  Year Ended
  Year Ended
 
 
 
December 31, 2010
 
December 31, 2009
 
December 31, 2008
 
 
  (Dollars in millions)
 

Statement of Operations data:

                                     

Revenue:

                                     
 

Retail

  $ 1,344.4     73.8 % $ 1,256.3     73.6 % $ 1,219.3     73.6 %
 

Franchising

    293.6     16.1 %   264.2     15.5 %   258.0     15.6 %
 

Manufacturing/Wholesale

    184.2     10.1 %   186.5     10.9 %   179.4     10.8 %
                           

Total net revenue

  $ 1,822.2     100.0 % $ 1,707.0     100.0 % $ 1,656.7     100.0 %

Operating expenses:

                                     

Cost of sales, including costs of warehousing and distribution, and occupancy

    1,179.9     64.8 %   1,116.4     65.4 %   1,082.6     65.3 %

Compensation and related benefits

    273.8     15.0 %   263.0     15.4 %   249.8     15.1 %

Advertising and promotion

    51.7     2.8 %   50.0     2.9 %   55.1     3.3 %

Other selling, general, and administrative

    92.9     5.1 %   86.9     5.1 %   88.0     5.3 %

Amortization expense

    7.8     0.4 %   9.8     0.6 %   10.9     0.7 %

Foreign currency (gain) loss

    (0.3 )   0.0 %   (0.1 )   0.0 %   0.7     0.0 %

Strategic alternative costs

    4.0     0.2 %                
                           

Total operating expenses

    1,609.8     88.3 %   1,526.0     89.4 %   1,487.1     89.7 %
                           

Operating income (loss):

                                     
 

Retail

    181.9     10.0 %   153.1     9.0 %   140.9     8.5 %
 

Franchising

    93.8     5.1 %   80.8     4.7 %   80.8     4.9 %
 

Manufacturing/Wholesale

    69.4     3.8 %   73.5     4.3 %   67.4     4.1 %
 

Unallocated corporate and other costs:

                                     
   

Warehousing and distribution costs

    (55.0 )   -3.0 %   (53.6 )   -3.1 %   (54.2 )   -3.3 %
   

Corporate costs

    (77.7 )   -4.3 %   (72.8 )   -4.3 %   (65.3 )   -3.9 %
                           
 

Subtotal unallocated corporate and other costs, net

    (132.7 )   -7.3 %   (126.4 )   -7.4 %   (119.5 )   -7.2 %

Total Operating income (loss)

    212.4     11.7 %   181.0     10.6 %   169.6     10.3 %

Interest expense, net

    65.4           69.9           83.0        
                                 

Income before income taxes

    147.0           111.1           86.6        

Income tax expense

    50.4           41.6           32.0        
                                 

Net income

  $ 96.6         $ 69.5         $ 54.6        
                                 

          Note:    The numbers in the above table have been rounded to millions. All calculations related to the Results of Operations for the year-over-year comparisons below were derived from unrounded data and could occasionally differ immaterially if you were to use the table above for these calculations.

Comparison of the Years Ended December 31, 2010 and 2009

    Revenues

          Our consolidated net revenues increased $115.2 million, or 6.7%, to $1,822.2 million for the year ended December 31, 2010 compared to $1,707.0 million for the same period in 2009. The increase was the result of increased sales in our Retail and Franchise segments, partially offset by a decline in our Manufacturing/Wholesale segment.

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          Retail.    Revenues in our Retail segment increased $88.1 million, or 7.0%, to $1,344.4 million for the year ended December 31, 2010 compared to $1,256.3 million for the same period in 2009. Domestic retail revenue increased $64.8 million as a result of an increase in our same store sales and $17.1 million in our non-same store sales. The same store sales increase includes GNC.com revenue, which increased $12.2 million, or 26.2%, to $59.0 million, compared to $46.8 million in 2009. Sales increases occurred primarily in the vitamin and sports nutrition categories. Our domestic company-owned same store sales, including our internet sales, improved by 5.6% for the year ended December 31, 2010 compared to the same period in 2009. Canadian retail revenue increased by $6.1 million in U.S. dollars, primarily due to the weakening of the U.S. dollar from 2009 to 2010. In local currency, Canadian retail revenue declined by CAD $3.3 million. This decline was primarily a result of a CAD $5.6 million, or 5.7%, decline in company-owned same store sales, partially offset by an increase of CAD $2.3 million in non-same store sales. Our company-owned store base increased by 83 domestic stores to 2,748 compared to 2,665 at December 31, 2009, primarily due to new store openings and franchise store acquisitions, and by two Canadian stores to 169 at December 31, 2010 compared to 167 at December 31, 2009.

          Franchise.    Revenues in our Franchise segment increased $29.4 million, or 11.1%, to $293.6 million for the year ended December 31, 2010 compared to $264.2 million for the same period in 2009. Domestic franchise revenue increased by $7.2 million, or 4.0%, to $185.9 million in 2010, compared to $178.7 million in 2009, primarily due to higher wholesale revenues and fees. There were 903 stores at December 31, 2010 compared to 909 stores at December 31, 2009. International franchise revenue increased by $22.2 million, or 25.8%, to $107.6 million in 2010, compared to $85.5 million in 2009, primarily the result of increases in product sales and royalties. Our international franchise store base increased by 130 stores to 1,437 at December 31, 2010 compared to 1,307 at December 31, 2009.

          Manufacturing/Wholesale.    Revenues in our Manufacturing/Wholesale segment, which includes third-party sales from our manufacturing facility in South Carolina, as well as wholesale sales to Rite Aid, www.drugstore.com and PetSmart, decreased $2.3 million, or 1.2%, to $184.2 million for the year ended December 31, 2010 compared to $186.5 million for 2009. Third-party sales decreased in the South Carolina manufacturing plant by $15.3 million due primarily to our transition from low margin commodity products to higher margin, specialty product contracts, and other revenue decreased by $1.1 million. This was partially offset by an increase in wholesale revenue of $14.1 million.

    Cost of Sales

          Consolidated cost of sales, which includes product costs, costs of warehousing and distribution and occupancy costs, increased $63.5 million, or 5.7%, to $1,179.9 million for the year ended December 31, 2010 compared to $1,116.4 million for the same period in 2009. Consolidated cost of sales, as a percentage of net revenue, was 64.8% for the year ended December 31, 2010 compared to 65.4% for the year ended December 31, 2009. Consolidated cost of sales increased primarily due to higher sales volumes, higher lease related costs as a result of operating 85 more stores at December 31, 2010 than 2009, and higher fulfillment costs related to increased web sales.

    Selling, General and Administrative ("SG&A") Expenses

          Our consolidated SG&A expenses, including compensation and related benefits, advertising and promotion expense, other SG&A expenses, and amortization expense, increased $20.5 million, or 5.1%, to $430.2 million, for the year ended December 31, 2010 compared to $409.7 million for the same period in 2009. These expenses, as a percentage of net revenue, were 23.6% for the year ended December 31, 2010 compared to 24.0% for the year ended December 31, 2009.

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          Compensation and related benefits.    Compensation and related benefits increased $10.8 million, or 4.1%, to $273.8 million for the year ended December 31, 2010 compared to $263.0 million for the same period in 2009. The increase was due to increases of: (1) $8.9 million in base wages and related payroll taxes to support our increased store base and sales volume and to comply with the increases in minimum wage rates; (2) $1.0 million in health insurance costs; and (3) $0.9 million in other compensation expenses.

          Advertising and promotion.    Advertising and promotion expenses increased $1.7 million, or 3.4%, to $51.7 million for the year ended December 31, 2010 compared to $50.0 million during the same period in 2009. Advertising expense increased primarily as a result of increases in media and production costs of $1.4 million, in store signage costs of $1.3 million, and other advertising costs of $0.9 million, partially offset by decreases in print advertising costs of $1.9 million.

          Other SG&A.    Other SG&A expenses, including amortization expense, increased $4.0 million, or 4.1%, to $100.7 million for the year ended December 31, 2010 compared to $96.7 million for the year ended December 31, 2009. Increases in other SG&A expenses included telecom expenses of $1.1 million, commissions of $2.1 million, credit card fees of $1.6 million, and other expense of $2.9 million. These were partially offset by decreases in amortization and depreciation expenses of $3.0 million and bad debt expense of $0.7 million.

          Strategic alternative costs.    In addition to the above, we incurred $4.0 million of non-recurring expenses principally related to the exploration of strategic alternatives.

    Foreign Currency (Loss) Gain

          Foreign currency (loss) gain for the years ended December 31, 2010 and 2009 resulted primarily from accounts payable activity with our Canadian subsidiary. We recognized income of $0.3 million and $0.1 million for the years ended December 31, 2010 and 2009, respectively.

    Operating Income

          As a result of the foregoing, consolidated operating income increased $31.4 million, or 17.3%, to $212.4 million for the year ended December 31, 2010 compared to $181.0 million for the same period in 2009. Operating income, as a percentage of net revenue, was 11.7% and 10.6% for the years ended December 31, 2010 and 2009, respectively.

          Retail.    Operating income increased $28.8 million, or 18.8%, to $181.9 million for the year ended December 31, 2010 compared to $153.1 million for the same period in 2009. The increase was primarily the result of higher dollar margins on increased sales volumes offset by increases in occupancy costs, compensation costs and other SG&A expenses.

          Franchise.    Operating income increased $13.0 million, or 16.1%, to $93.8 million for the year ended December 31, 2010 compared to $80.8 million for the same period in 2009. This increase was due to increases in royalty income, franchise fees, higher dollar margins on increased product sales to franchisees and reductions in bad debt expenses and amortization expense.

          Manufacturing/Wholesale.    Operating income decreased $4.1 million, or 5.6%, to $69.4 million for the year ended December 31, 2010 compared to $73.5 million for the same period in 2009. This decrease was primarily the result of lower dollar margins on decreased sales volumes from our South Carolina manufacturing facility.

          Warehousing and Distribution Costs.    Unallocated warehousing and distribution costs increased $1.4 million, or 2.6%, to $55.0 million for the year ended December 31, 2010 compared

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to $53.6 million for the same period in 2009. The increase in costs was primarily due to increases in distribution wages and fuel costs.

          Corporate Costs.    Corporate overhead costs increased $4.9 million, or 6.7%, to $77.7 million for the year ended December 31, 2010 compared to $72.8 million for the same period in 2009. This increase was due to increases in compensation expenses, incentives and health insurance costs offset by decreases in other SG&A expenses. In addition, we incurred $4.0 million of non-recurring expenses principally related to the exploration of strategic alternatives.

    Interest Expense

          Interest expense decreased $4.5 million, or 6.4%, to $65.4 million for the year ended December 31, 2010 compared to $69.9 million for the same period in 2009. This decrease was primarily attributable to decreases in interest rates on the variable portion of our debt in 2010 compared to 2009.

    Income Tax Expense

          We recognized $50.4 million of income tax expense (or 34.3% of pre-tax income) during the year ended December 31, 2010 compared to $41.6 million (or 37.4% of pre-tax income) for the same period in 2009. During 2010, we recorded a valuation allowance adjustment of $3.1 million, which reduced income tax expense. This valuation allowance adjustment reflected a change in circumstances that caused a change in judgment about the realizability of certain deferred tax assets related to state net operating losses. As a result of being able to fully utilize our remaining federal net operating losses in 2009, we were able to realize additional federal income tax benefits during 2010 related to certain federal tax credits and incentives.

    Net Income

          As a result of the foregoing, consolidated net income increased $27.1 million to $96.6 million for the year ended December 31, 2010 compared to $69.5 million for the same period in 2009.

Comparison of the Years Ended December 31, 2009 and 2008

    Revenues

          Our consolidated net revenues increased $50.3 million, or 3.0%, to $1,707.0 million for the year ended December 31, 2009 compared to $1,656.7 million for the same period in 2008. The increase was the result of increased sales in all of our segments.

          Retail.    Revenues in our Retail segment increased $37.0 million, or 3.0%, to $1,256.3 million for the year ended December 31, 2009 compared to $1,219.3 million for the same period in 2008. The increase from 2008 to 2009 included an increase of $31.6 million in our same store sales and an increase of $5.9 million in our non-same store sales. The same store sales increase includes GNC.com revenue, which increased $10.8 million, or 29.9%, to $46.8 million, compared to $36.0 million in 2008. Sales increases occurred in the major product categories of VMHS and sports nutrition. Sales in the diet category were negatively impacted by the Hydroxycut recall that occurred in May 2009. Our domestic company-owned same store sales, including our internet sales, improved by 2.8% for the year ended December 31, 2009 compared to 2008. For the year ended December 31, 2009, Canadian retail revenue decreased by $0.5 million in U.S. dollars, primarily due to the volatility of the U.S. dollar. In local currency, however, Canadian retail revenue increased by CAD $6.3 million. This increase was primarily a result of an increase of CAD $0.7 million, or 0.8%, in company-owned same store sales, and an increase of CAD $5.6 million in our non-same store sales. Our company-owned store base increased by 51 domestic stores to

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2,665 compared to 2,614 at December 31, 2008, primarily due to new store openings and franchise store acquisitions, and by seven Canadian stores to 167 at December 31, 2009 compared to 160 at December 31, 2008, primarily due to new store openings.

          Franchise.    Revenues in our Franchise segment increased $6.2 million, or 2.4%, to $264.2 million for the year ended December 31, 2009 compared to $258.0 million for the same period in 2008. Domestic franchise revenue decreased by $1.4 million, to $178.7 million in 2009, compared to $180.1 million in 2008, as increased product sales were more than offset by lower franchise fee revenue. Domestic royalty income was flat despite operating 45 fewer stores during 2009 compared to 2008. There were 909 stores at December 31, 2009 compared to 954 stores at December 31, 2008. International franchise revenue increased by $7.6 million for the year ended December 31, 2009 as a result of increases in product sales, partially offset by lower franchise fee revenue. International royalty income increased $0.5 million for the 2009 period compared to the 2008 period as sales increases in our franchisees' respective local currencies were impacted by the strengthening of the U.S. dollar from 2008 to 2009. Our international franchise store base increased by 117 stores to 1,307 at December 31, 2009 compared to 1,190 at December 31, 2008.

          Manufacturing/Wholesale.    Revenues in our Manufacturing/Wholesale segment, which includes third-party sales from our manufacturing facility in South Carolina, as well as wholesale sales to Rite Aid and www.drugstore.com, increased $7.1 million, or 4.0%, to $186.5 million for the year ended December 31, 2009 compared to $179.4 million for 2008. Sales increased in the South Carolina plant by $4.4 million, and revenues associated with Rite Aid increased by $1.4 million. This increase was due to increases in wholesale and consignment sales to Rite Aid of $4.6 million, partially offset by lower initial and renewal license fee revenue of $3.2 million as a result of Rite Aid opening 197 fewer store-within-a-stores in 2009 compared to 2008. In addition, sales to www.drugstore.com increased by $1.3 million in 2009 compared to 2008.

    Cost of Sales

          Consolidated cost of sales, which includes product costs, costs of warehousing and distribution and occupancy costs, increased $33.8 million, or 3.1%, to $1,116.4 million for the year ended December 31, 2009 compared to $1,082.6 million for the same period in 2008. Consolidated cost of sales, as a percentage of net revenue, was 65.4% for the year ended December 31, 2009 compared to 65.3% for the year ended December 31, 2008. The increase in cost of sales was due primarily to increased products costs resulting from higher sales volumes and raw material costs and increased occupancy costs resulting from higher depreciation expense and lease-related costs.

    SG&A Expenses

          Our consolidated SG&A expenses, including compensation and related benefits, advertising and promotion expense, other selling, general and administrative expenses, and amortization expense, increased $5.9 million, or 1.5%, to $409.7 million, for the year ended December 31, 2009 compared to $403.8 million for the same period in 2008. These expenses, as a percentage of net revenue, were 24.0% for the year ended December 31, 2009 compared to 24.4% for the year ended December 31, 2008.

          Compensation and related benefits.    Compensation and related benefits increased $13.2 million, or 5.3%, to $263.0 million for the year ended December 31, 2009 compared to $249.8 million for the same period in 2008. The increase was due to increases of: (1) $8.5 million in base wages to support our increased store base and sales volume and to comply with the increases in minimum wage rates; (2) $1.4 million in health insurance costs; (3) $1.2 million in commissions and incentive expense; and (4) $1.0 million in other wage related expenditures. In

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addition, 2008 expenses included a $1.1 million reduction in base wages due to a change in our vacation policy effective March 31, 2008.

          Advertising and promotion.    Advertising and promotion expenses decreased $5.1 million, or 9.1%, to $50.0 million for the year ended December 31, 2009 compared to $55.1 million during the same period in 2008. Advertising expense decreased primarily as a result of decreases in media costs of $2.3 million and print advertising costs of $3.4 million, partially offset by increases in other advertising costs of $0.6 million.

          Other SG&A.    Other SG&A expenses, including amortization expense, decreased $2.2 million or 2.3%, to $96.7 million for the year ended December 31, 2009 compared to $98.9 million for the year ended December 31, 2008. Decreases in bad debt expense of $2.3 million, amortization expense of $1.2 million and other selling expenses of $0.3 million were partially offset by increases in telecommunications expenses of $1.9 million due to the installation of a new point-of-sale register system in 2008 and professional fees of $0.8 million. In addition, 2009 other SG&A includes a $1.1 million gain from proceeds received from the Visa/Mastercard antitrust litigation settlement.

    Foreign Currency (Loss) Gain

          Foreign currency (loss) gain for the years ended December 31, 2009 and 2008 resulted primarily from accounts payable activity with our Canadian subsidiary. We recognized income of $0.1 million for the year ended December 31, 2009 and a loss of $0.7 million for the year ended December 31, 2008.

    Operating Income

          As a result of the foregoing, consolidated operating income increased $11.4 million, or 6.7%, to $181.0 million for the year ended December 31, 2009 compared to $169.6 million for the same period in 2008. Operating income, as a percentage of net revenue, was 10.6% for the year ended December 31, 2009 and 10.2% for the year ended December 31, 2008.

          Retail.    Retail operating income increased $12.2 million, or 8.7%, to $153.1 million for the year ended December 31, 2009 compared to $140.9 million for the same period in 2008. The increase was primarily the result of higher dollar margins on increased sales volumes and reduced advertising spending, partially offset by increases in occupancy costs, compensation costs and other SG&A expenses.

          Franchise.    Franchise operating income is unchanged at $80.8 million for each of the years ended December 31, 2009 and 2008.

          Manufacturing/Wholesale.    Manufacturing/Wholesale operating income increased $6.1 million, or 9.0%, to $73.5 million for the year ended December 31, 2009 compared to $67.4 million for the same period in 2008. This increase was primarily the result of increased margins from our South Carolina manufacturing facility, partially offset by decreases in Rite Aid license fee revenue.

          Warehousing and Distribution Costs.    Unallocated warehousing and distribution costs decreased $0.6 million, or 1.3%, to $53.6 million for the year ended December 31, 2009 compared to $54.2 million for the same period in 2008. The decrease was primarily due to decreases in fuel costs.

          Corporate Costs.    Corporate overhead costs increased $7.5 million, or 11.7%, to $72.8 million for the year ended December 31, 2009 compared to $65.3 million for the same period in 2008. The increase was primarily due to an increase in compensation expense and professional fees in 2009.

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In addition, 2008 compensation expense includes a $1.1 million reduction due to a change in our vacation policy effective March 31, 2008.

    Interest Expense

          Interest expense decreased $13.1 million, or 15.7%, to $69.9 million for the year ended December 31, 2009 compared to $83.0 million for the same period in 2008. This decrease was primarily attributable to decreases in interest rates on our variable rate debt in 2009 compared to 2008 and $25.3 million in principal payments during 2009, compared to $8.0 million in principal payments in 2008.

    Income Tax Expense

          We recognized $41.6 million of income tax expense (or 37.4% of pre-tax income) during the year ended December 31, 2009 compared to $32.0 million (or 36.9% of pre-tax income) for the same period of 2008. For the year ended December 31, 2009, a $0.5 million discrete tax benefit was recorded while a $2.0 million discrete tax benefit was recorded for the year ended December 31, 2008.

    Net Income

          As a result of the foregoing, consolidated net income increased $14.9 million to $69.5 million for the year ended December 31, 2009 compared to $54.6 million for the same period in 2008.

Liquidity and Capital Resources

          At December 31, 2010, we had $193.9 million in cash and cash equivalents and $484.5 million in working capital, compared to $89.9 million in cash and cash equivalents and $397.0 million in working capital at December 31, 2009. The $87.5 million increase in our working capital was driven by increases in our inventory, accounts receivable, and cash and a decrease in our accrued interest. This was offset by increases in our current portion of long-term debt and accrued payroll and related liabilities.

          At December 31, 2009, we had $89.9 million in cash and cash equivalents and $397.0 million in working capital compared to $44.3 million in cash and cash equivalents and $306.8 million in working capital at December 31, 2008. The $90.2 million increase in our working capital was driven by increases in our inventory and cash and a decrease in our accrued interest, accounts payable and current portion of long-term debt. This was partially offset by a decrease in our deferred taxes.

          We expect to fund our operations through internally generated cash and, if necessary, from borrowings under the Revolving Credit Facility. At December 31, 2010, assuming completion of the Refinancing, we would have had $71.2 million available under the Revolving Credit Facility, after giving effect to $8.8 million utilized to secure letters of credit.

          We expect that our primary uses of cash in the near future will be for purposes of fulfilling debt service requirements, capital expenditures and working capital requirements. In July 2009, Centers' board of directors declared a $13.6 million dividend to our indirect wholly owned subsidiary, GNC Corporation, with a payment date of August 30, 2009. Those funds were then dividended to and are currently held by us. In March 2010, Centers' board of directors declared and paid a $28.4 million dividend to its direct parent company, GNC Corporation. Those funds were then dividended to and are currently held by us. Each dividend was paid with cash generated from operations. In addition, Centers used a portion of the net proceeds, together with cash on hand, to pay a dividend to us of $185 million and contribute $85 million to GNC Funding, which amount GNC Funding then loaned to us. Although the Senior Credit Facility has similar exceptions to the

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payment of cash dividends as the exceptions provided in the Old Credit Facility, the payment of the $185 million dividend was a specific exception available in connection with the Refinancing.

          We currently anticipate that cash generated from operations, together with amounts available under the Revolving Credit Facility, will be sufficient for the term of the facility, which matures on March 15, 2016, to meet our operating expenses, capital expenditures and debt service obligations as they become due. However, our ability to make scheduled payments of principal on, to pay interest on, or to refinance our debt and to satisfy our other debt obligations will depend on our future operating performance, which will be affected by general economic, financial and other factors beyond our control. We are currently in compliance with our debt covenant reporting and compliance obligations under the Revolving Credit Facility.

Cash Provided by Operating Activities

          Cash provided by operating activities was $141.5 million, $114.0 million and $77.4 million during the years ended December 31, 2010, 2009 and 2008, respectively. The changes between each of the periods were primarily due to changes in net income and in working capital accounts. Net income increased $27.0 million for the year ended December 31, 2010 compared to the same period in 2009. Net income increased $14.8 million for the year ended December 31, 2009 compared to the same period in 2008.

          For the year ended December 31, 2010, inventory increased $26.3 million compared to the same period in 2009 as a result of increases in our finished goods and a decrease in our reserves. Accounts receivable increased $8.8 million, primarily due to increased sales to franchisees. Accrued liabilities increased by $9.9 million, primarily due to increased deferred revenue.

          For the year ended December 31, 2009, inventory increased $15.7 million, as a result of increases in our finished goods and a decrease in our reserves. Accounts payable decreased $28.1 million, primarily due to the timing of disbursements. Accrued liabilities increased by $2.1 million, primarily the result of increased deferred revenue.

          For the year ended December 31, 2008, inventory increased $48.2 million, as a result of increases in our finished goods and work in process inventories. Accounts payable increased $22.1 million, primarily the result of increases in inventory. Accrued liabilities decreased by $16.1 million, primarily the result of decreases in accrued payroll related to the timing of the pay with year end.

Cash Used in Investing Activities

          We used cash from investing activities of $36.1 million, $42.2 million and $60.4 million for the years ended December 31, 2010, 2009 and 2008, respectively. We used cash of $3.1 million, $11.3 million and $10.8 million for the years ended December 31, 2010, 2009 and 2008, respectively, related to payments to former stockholders in connection with the Merger. Capital expenditures, which were primarily for improvements to our retail stores and our South Carolina manufacturing facility and which represent the majority of our remaining cash used in investing activities, were $32.5 million, $28.7 million and $48.7 million for the years ended December 31, 2010, 2009 and 2008, respectively. In 2008, we invested $1.0 million in the purchase of certain intangible assets from a third party.

          Our capital expenditures typically consist of certain periodic updates in our company-owned stores and ongoing upgrades and improvements to our manufacturing facilities.

          In each of 2011 and 2012, we expect our capital expenditures to range between $40 and $50 million, which includes costs associated with growing our domestic square footage. We

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anticipate funding our 2011 capital requirements with cash flows from operations and, if necessary, borrowings under the Senior Credit Facility.

Cash Used in Financing Activities

          We used cash of $1.7 million in 2010 for payments on long-term debt.

          We used cash of $25.3 million in 2009 for payments on long-term debt, including $3.8 million for an excess cash payment in March 2009 under the requirements of the Old Senior Credit Facility. In addition, we repaid the outstanding $5.4 million balance on the Old Revolving Credit Facility in May 2009 and made $14.0 million in optional repayments on the Old Term Loan Facility ($9.0 million in June 2009 and $5.0 million in December 2009).

          We used cash from financing activities of $8.0 million in 2008 for required payments on long-term debt and received $5.4 million from borrowings on the Old Revolving Credit Facility.

          The following is a summary of our debt:

          Senior Credit Facility.    On March 4, 2011, Centers entered into the Senior Credit Facility, consisting of the Term Loan Facility and the Revolving Credit Facility. For a summary of the Senior Credit Facility, see "Description of Certain Debt — Senior Credit Facility."

          In connection with the Refinancing, Centers used a portion of the net proceeds from the Term Loan Facility to refinance its former indebtedness, including all outstanding indebtedness under the Old Senior Credit Facility, the Senior Notes and the Senior Subordinated Notes.

          Old Senior Credit Facility.    The Old Senior Credit Facility consisted of the Old Term Loan Facility and the Old Revolving Credit Facility. As of December 31, 2010 and 2009, $8.8 million and $7.9 million were pledged to secure letters of credit, respectively. The Old Senior Credit Facility permitted us to prepay a portion or all of the outstanding balance without incurring penalties (except LIBOR breakage costs). GNC Corporation, our indirect wholly owned subsidiary, and Centers' then existing indirect domestic subsidiaries guaranteed Centers' obligations under the Old Senior Credit Facility. In addition, the Old Senior Credit Facility was collateralized by first priority pledges (subject to permitted liens) of Centers' equity interests and the equity interests of Centers' domestic subsidiaries.

          All borrowings under the Old Senior Credit Facility bore interest, at our option, at a rate per annum equal to (i) the higher of (x) the prime rate (as publicly announced by JPMorgan Chase Bank, N.A. as its prime rate in effect) and (y) the federal funds effective rate, plus 0.50% per annum plus, at December 31, 2010, in each case, applicable margins of 1.25% per annum for the Old Term Loan Facility and 1.0% per annum for the Old Revolving Credit Facility or (ii) adjusted LIBOR plus 2.25% per annum for the Old Term Loan Facility and 2.0% per annum for the Old Revolving Credit Facility. In addition to paying interest on outstanding principal under the Old Senior Credit Facility, we were required to pay a commitment fee to the lenders under the Old Revolving Credit Facility in respect of unutilized revolving loan commitments at a rate of 0.50% per annum.

          Senior Notes.    In connection with the Merger, Centers completed a private offering of $300.0 million of its Senior Notes. Interest on the Senior Notes was payable semi-annually in arrears on March 15 and September 15 of each year. Interest on the Senior Notes accrued at a variable rate and was 5.8% at December 31, 2010. The Senior Notes were Centers' senior non-collateralized obligations and were effectively subordinated to all of Centers' existing collateralized debt, including the Old Senior Credit Facility, to the extent of the assets securing such debt, ranked equally with all of Centers' existing non-collateralized senior debt and ranked senior to all Centers' existing senior subordinated debt, including the Senior Subordinated Notes. The Senior Notes were guaranteed on a senior non-collateralized basis by each of Centers' then existing domestic subsidiaries (as defined in the Senior Notes indenture).

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          Senior Subordinated Notes.    In connection with the Merger, Centers completed a private offering of $110.0 million of Centers' Senior Subordinated Notes. The Senior Subordinated Notes were Centers' senior subordinated non-collateralized obligations and were subordinated to all its existing senior debt, including the Old Senior Credit Facility and the Senior Notes, and ranked equally with all of Centers' existing senior subordinated debt and ranked senior to all Centers' existing subordinated debt. The Senior Subordinated Notes were guaranteed on a senior subordinated non-collateralized basis by each of Centers' then existing domestic subsidiaries (as defined in the Senior Subordinated Notes indenture). Interest on the Senior Subordinated Notes accrued at the rate of 10.75% per year from March 16, 2007 and was payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2007.

Contractual Obligations

          The following table summarizes our future minimum non-cancelable contractual obligations at December 31, 2010.

 
  Payments due by period  
 
 
Total
 
Less than
1 year
 
1-3 years
 
4-5 years
 
After 5 years
 
 
  (in millions)
 

Long-term debt obligations(1)

  $ 1,060.1   $ 28.1   $ 621.4   $ 300.6   $ 110.0  

Scheduled interest payments(2)

    177.6     59.1     99.9     18.6      

Operating lease obligations(3)

    430.8     110.9     153.8     88.5     77.6  

Purchase commitments(4)(5)

    19.8     9.7     4.3     4.0     1.8  
                       

  $ 1,688.3   $ 207.8   $ 879.4   $ 411.7   $ 189.4  
                       

(1)
These balances consist of the following debt obligations: (a) $644.4 million for the Old Senior Credit Facility based on a variable interest rate; (b) $300.0 million for Centers' Senior Notes based on a variable interest rate; (c) $110.0 million for Centers' Senior Subordinated Notes with a fixed interest rate; and (d) $5.7 million for Centers' mortgage with a fixed interest rate. Repayment of the Old Senior Credit Facility is based on the current amortization schedule and does not take into account any unscheduled payments that may occur due to our future cash positions.

(2)
The interest that will accrue on the long-term obligations includes variable rate payments, which are estimated using the associated LIBOR index as of December 31, 2010. The Old Senior Credit Facility uses the three month LIBOR index while Centers' Senior Notes use the six month LIBOR index. Also included in the scheduled interest payments is the activity associated with our interest rate swap agreements which also use the three month LIBOR index and the six month LIBOR index.

(3)
These balances consist of the following operating leases: (a) $414.6 million for company-owned retail stores; (b) $66.9 million for franchise retail stores, which is offset by $66.9 million of sublease income from franchisees; and (c) $16.2 million relating to various leases for tractors/trailers, warehouses, automobiles, and various equipment at our facilities. Operating lease obligations exclude insurance, taxes, maintenance, percentage rent, and other costs. These amounts are subject to fluctuation from year to year. For each of the years ended December 31, 2008, 2009 and 2010, respectively, these amounts collectively represented approximately 36% of the aggregate costs associated with our company-owned retail store operating leases.

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(4)
These balances consist of $10.6 million of advertising and $9.2 million related to the ACOF Management Services Agreement and Class B common stock. See "Certain Relationships and Related Transactions — ACOF Management Services Agreement" and "— Special Dividend".

(5)
We are unable to make a reasonably reliable estimate as to when cash settlement with taxing authorities may occur for our unrecognized tax benefits. Also, certain other long term liabilities, included in our consolidated balance sheet relate principally to the fair value of our interest rate swap agreement, and rent escalation liabilities, and we are unable to estimate the timing of these payments. Therefore, these long term liabilities are not included in the table above. See Note 5, "Income Taxes", and Note 13, "Other Long Term Liabilities", to our audited consolidated financial statements for additional information.

          In addition to the obligations set forth in the table above, we have entered into employment agreements with certain executives that provide for compensation and certain other benefits. Under certain circumstances, including a change of control, some of these agreements provide for severance or other payments, if those circumstances would ever occur during the term of the employment agreement.

          On March 4, 2011, Centers entered into the Senior Credit Facility. In connection with the Refinancing, Centers used a portion of the net proceeds from the Term Loan Facility to refinance the Old Senior Credit Facility, the Senior Notes and the Senior Subordinated Notes.

Off Balance Sheet Arrangements

          As of December 31, 2010, 2009 and 2008, we had no relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off balance sheet arrangements, or other contractually narrow or limited purposes. We are, therefore, not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships.

Quantitative and Qualitative Disclosures About Market Risk

          Market risk represents the risk of changes in the value of market risk sensitive instruments caused by fluctuations in interest rates, foreign exchange rates and commodity prices. Changes in these factors could cause fluctuations in the results of our operations and cash flows. In the ordinary course of business, we are primarily exposed to foreign currency and interest rate risks. We do not use derivative financial instruments in connection with these commodity market risks.

          We are exposed to market risks from interest rate changes on Centers' variable rate debt. Although changes in interest rates do not impact our operating income, the changes could affect the fair value of our interest rate swaps and interest payments. As of December 31, 2010, Centers had fixed rate debt of $115.7 million and variable rate debt of $942.8 million. In September 2008, Centers entered into two forward agreements with start dates of the expiration dates of two pre-existing interest rate swap agreements (April 2009 and April 2010). In September 2008, Centers also entered into a new interest rate swap agreement with an effective date of September 30, 2008 that effectively converted an additional notional amount of $100.0 million of debt from a floating to a fixed interest rate. The $100.0 million notional amount had a three month LIBOR tranche conforming to the interest payment dates on the Old Term Loan Facility. In June 2009, Centers entered into a new swap agreement with an effective date of September 15, 2009. The $150.0 million notional amount had a six month LIBOR tranche conforming to the interest payment dates on the Senior Notes.

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          These agreements are summarized in the following table:

Derivative
 
Total Notional Amount
 
Term
 
Counterparty Pays
 
Company Pays
 
 

Interest Rate Swap

  $150.0 million     April 2009-April 2011     3 month LIBOR     3.07 %
 

Interest Rate Swap

  $150.0 million     April 2010-April 2011     3 month LIBOR     3.41 %
 

Interest Rate Swap

  $100.0 million     September 2008-September 2011     3 month LIBOR     3.31 %
 

Interest Rate Swap

  $150.0 million     September 2009-September 2012     6 month LIBOR     2.68 %

          Based on Centers' variable rate debt balance as of December 31, 2010, a 1% change in interest rates would have increased or decreased our annual interest cost by $3.9 million.

          In March 2011, each of the foregoing agreements was terminated in connection with the Refinancing. In the future, we may enter into similar arrangements with respect to borrowings under the Senior Credit Facility.

Foreign Exchange Rate Market Risk

          We are subject to the risk of foreign currency exchange rate changes in the conversion from local currencies to the U.S. dollar of the reported financial position and operating results of our non-U.S. based subsidiaries. We are also subject to foreign currency exchange rate changes for purchases of goods and services that are denominated in currencies other than the U.S. dollar. The primary currency to which we are exposed to fluctuations is the Canadian Dollar. The fair value of our net foreign investments and our foreign denominated payables would not be materially affected by a 10% adverse change in foreign currency exchange rates for the periods presented.

Interest Rate Market Risk

          A portion of Centers' debt is subject to changing interest rates. Although changes in interest rates do not impact our operating income, the changes could affect the fair value of such debt and related interest payments. Based on our variable rate debt balance as of December 31, 2010, a 1.0% change in interest rates would increase or decrease our annual interest cost by $3.9 million.

Effect of Inflation

          Inflation generally affects us by increasing costs of raw materials, labor, and equipment. We do not believe that inflation had any material effect on our results of operations in the periods presented in our consolidated financial statements.

Critical Accounting Estimates

          You should review the significant accounting policies described in the notes to our consolidated financial statements under the heading "Basis of Presentation and Summary of Significant Accounting Policies" included in this prospectus.

Use of Estimates

          Certain amounts in our financial statements require management to use estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Our accounting policies are described in the notes to our consolidated financial statements under the heading "Basis of Presentation and Summary of Significant Accounting Policies" included

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elsewhere in this prospectus. Our critical accounting policies and estimates are described in this section. An accounting estimate is considered critical if:

    the estimate requires management to make assumptions about matters that were uncertain at the time the estimate was made;

    different estimates reasonably could have been used; or

    changes in the estimate that would have a material impact on our financial condition or our results of operations are likely to occur from period to period.

Management believes that the accounting estimates used are appropriate and the resulting balances are reasonable. However, actual results could differ from the original estimates, requiring adjustments to these balances in future periods.

Revenue Recognition

          We operate primarily as a retailer, through company-owned stores, franchise stores, and to a lesser extent, as a wholesaler. On December 28, 2005, we started recognizing revenue through product sales on our website, GNC.com. We apply the provisions of the standard on revenue recognition, which requires the following:

    Persuasive evidence of an arrangement exists.

    Delivery has occurred or services have been rendered.

    The price is fixed or determinable.

    Collectability is reasonably assured.

          We recognize revenues in our Retail segment at the moment a sale to a customer is recorded. Gross revenues are reduced by actual customer returns and a provision for estimated future customer returns, which is based on management's estimates after a review of historical customer returns. These estimates are based on historical sales return data, applied to current period sales subject to returns provisions per our company policy. Our customer returns allowance was $2.2 million and $2.4 million at December 31, 2010 and December 31, 2009, respectively. The impact of customer returns on revenue was immaterial for each of the years ended December 31, 2010, 2009 and 2008. We recognize revenues on product sales to franchisees and other third parties when the risk of loss, title and insurable risks have transferred to the franchisee or third-party. We recognize revenues from franchise fees at the time a franchise store opens or at the time of franchise renewal or transfer, as applicable.

Inventories

          Where necessary, we adjust the carrying value of our inventory to the lower of cost or net realizable value. These estimates require us to make approximations about the future demand for our products in order to categorize the status of such inventory items as slow moving, obsolete, or in excess of need. These future estimates are subject to the ongoing accuracy of management's forecasts of market conditions, industry trends, and competition. While we make estimates of future demand based on historical experience, current expectations and assumptions that we believe are reasonable, if actual demand or market conditions differ from these expectations and assumptions, actual results could differ from our estimates. We are also subject to volatile changes in specific product demand as a result of unfavorable publicity, government regulation, and rapid changes in demand for new and improved products or services. Our inventory reduction for obsolescence and shrinkage was $11.0 million and $9.6 million at December 31, 2010 and December 31, 2009, respectively. This represented 2.8% and 2.5% of our gross inventory value at each period,

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respectively. The change from period to period is primarily the result of inventory fluctuations and management of inventory movement throughout our system. The impact on cost of goods sold as a result of these allowances was immaterial for each of the years ended December 31, 2010, 2009 and 2008.

Accounts Receivable and Allowance for Doubtful Accounts

          The majority of our retail revenues are received as cash or cash equivalents. The majority of our franchise revenues are billed to the franchisees with varying terms for payment. We offer financing to qualified domestic franchisees with the initial purchase of a franchise location. The notes are demand notes, payable monthly over periods of five to seven years. We generate a significant portion of our revenue from ongoing product sales to franchisees and third-party customers. An allowance for doubtful accounts is established based on regular evaluations of our franchisees' and third-party customers' financial health, the current status of trade receivables, and any historical write-off experience. We maintain both specific and general reserves for doubtful accounts. General reserves are based upon our historical bad debt experience, overall review of our aging of accounts receivable balances, general economic conditions of our industry, or the geographical regions and regulatory environments of our third-party customers and franchisees. Management's estimates of the franchisees' financial health include forecasts of the customers' and franchisees' future operating results and the collectability of receivables from them. While we believe that our business operations and communication with customers and franchisees allows us to make reasonable estimates of their financial health, actual results could differ from those predicted by management, and actual bad debt expense could differ from forecasted results. Our allowance for doubtful accounts was $1.6 million and $1.8 million at December 31, 2010 and December 31, 2009, respectively. Changes in the allowance from period to period are primarily a result of the composition of customers and their financial health. Bad debt expense was immaterial for each of the years ended December 31, 2010, 2009 and 2008.

Impairment of Long-Lived Assets

          Long-lived assets, including fixed assets and intangible assets with finite useful lives, are evaluated periodically by us for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. If the sum of the undiscounted future cash flows is less than the carrying value, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset. These estimates of cash flow require significant management judgment and certain assumptions about future volume, revenue and expense growth rates, foreign exchange rates, devaluation and inflation. While we make estimates based on historical experience, current expectations and assumptions that we believe are reasonable, if actual results, including future cash flows, differ from our estimates, our estimates may differ from actual impairment recognized. There has been no impairment recorded in the years ended December 31, 2010, 2009 and 2008.

Self-Insurance

          We have procured insurance for such areas as: (1) general liability; (2) product liability; (3) directors and officers liability; (4) property insurance; and (5) ocean marine insurance. We are self-insured for such areas as: (1) medical benefits; (2) physical damage to our tractors, trailers and fleet vehicles for field personnel use; and (3) physical damages that may occur at the corporate store locations. We are not insured for certain property and casualty risks due to the frequency and severity of a loss, the cost of insurance and the overall risk analysis. Our associated liability for this self-insurance was not significant as of December 31, 2010 and 2009. Prior to 2003, General

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Nutrition Companies, Inc. was included as an insured under several of its then ultimate parent's global insurance policies.

          We carry product liability insurance with a retention of $3.0 million per claim with an aggregate cap on retained losses of $10.0 million. We carry general liability insurance with retention of $110,000 per claim with an aggregate cap on retained losses of $600,000. The majority of our workers' compensation and auto insurance are in a deductible/retrospective plan. We reimburse the insurance company for the workers' compensation and auto liability claims, subject to a $250,000 and $100,000 loss limit per claim, respectively.

          As part of the medical benefits program, we contract with national service providers to provide benefits to our employees for all medical, dental, vision and prescription drug services. We then reimburse these service providers as claims are processed from our employees. We maintain a specific stop loss provision of $300,000 per incident with a maximum limit up to $2.0 million per participant, per benefit year, respectively. We have no additional liability once a participant exceeds the $2.0 million ceiling. We utilize a review of historical claims, including the timing of claims reported versus payment of claims, to estimate future liabilities related to our medical benefit program. While we make these estimates based on historical experience, current expectations and assumptions that we believe are reasonable, actual results could differ from our estimates. Our liability for medical claims is included as a component of accrued benefits as described in Note 10, "Accrued Payroll and Related Liabilities", to our audited consolidated financial statements included elsewhere in this prospectus, and was $1.9 million and $2.0 million as of December 31, 2010 and 2009, respectively.

Goodwill and Indefinite-Lived Intangible Assets

          On an annual basis, we perform a valuation of the goodwill and indefinite lived intangible assets associated with our operating segments. To the extent that the fair value associated with the goodwill and indefinite-lived intangible assets is less than the recorded value, we write down the value of the asset. The valuation of the goodwill and indefinite-lived intangible assets is affected by, among other things, our business plan for the future, and estimated results of future operations. Changes in the business plan or operating results that are different than the estimates used to develop the valuation of the assets may result in an impact on their valuation. While we make these estimates based on historical experience, current expectations and assumptions that we believe are reasonable, if actual results, including future operating results, differ from our estimates, our estimates may differ from actual impairment recognized.

          We conduct impairment testing annually at the beginning of the fourth quarter, using third quarter results. In the event of declining financial results and market conditions, we could be required to recognize impairments to our goodwill and intangible assets. The most recent valuation was performed at October 1, 2010, and no impairment was found. There was also no impairment found during 2010, 2009 or 2008. See Note 4, "Goodwill and Intangible Assets", to our audited consolidated financial statements included elsewhere in this prospectus. We do not currently expect to incur additional impairment charges in the foreseeable future; however, the risks relating to our business, as described above under "Risk Factors", could have a negative effect on our business and operating results which could affect the valuation of our intangibles.

Leases

          We have various operating leases for company-owned and franchise store locations and equipment. Store leases generally include amounts relating to base rental, percent rent and other charges such as common area maintenance fees and real estate taxes. Periodically, we receive varying amounts of reimbursements from landlords to compensate us for costs incurred in the

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construction of stores. We amortize these reimbursements as an offset to rent expense over the life of the related lease. We determine the period used for the straight-line rent expense for leases with option periods and conform it to the term used for amortizing improvements.

Income Taxes

          We compute our annual tax rate based on the statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we earn income. Significant judgment is required in determining our annual tax rate and in evaluating uncertainty in our tax positions. We recognize a benefit for tax positions that we believe will more likely than not be sustained upon examination. The amount of benefit recognized is the largest amount of benefit that we believe has more than a 50% probability of being realized upon settlement. We regularly monitor our tax positions and adjust the amount of recognized tax benefit based on our evaluation of information that has become available since the end of our last financial reporting period. The annual tax rate includes the impact of these changes in recognized tax benefits. The difference between the amount of benefit taken or expected to be taken in a tax return and the amount of benefit recognized for financial reporting represents unrecognized tax benefits. These unrecognized tax benefits are presented in the balance sheet principally within accrued income taxes.

          We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. When assessing the need for valuation allowances, we consider future taxable income and ongoing prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, we would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income.

Recently Issued Accounting Pronouncements

    Fair Value

          In January 2010, the FASB issued ASU 2010-06 "Improving Disclosures about Fair Value Measurements". ASU 2010-06 requires additional disclosures about fair value measurements including transfers in and out of Levels 1 and 2 and more disaggregation for the different types of financial instruments. This ASU became effective for annual and interim reporting periods beginning after December 15, 2009 for most of the new disclosures and for periods beginning after December 15, 2010 for the new Level 3 disclosures. Comparative disclosures are not required in the first year the disclosures are required. The adoption of this standard did not have any impact on our consolidated financial statements.

    Other

          In December 2009, the FASB issued ASU No. 2009-17, "Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities", which incorporates into the FASB Codification amendments to FASB Interpretation No. 46(R), "Consolidation of Variable Interest Entities", made by Statement of Financial Accounting Standard No. 167, "Accounting for Variable Interest Entities", to require that a comprehensive qualitative analysis be performed to determine whether a holder of variable interests in a variable interest entity also has a controlling financial interest in that entity. In addition, the amendments require that the same type of analysis be applied to entities that were previously designated as qualified special-purpose entities. The amendments were effective as of January 1, 2010. The adoption of ASU No. 2009-17 did not have a material impact on our consolidated financial position, results of operations, and cash flows.

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Management's Report on Internal Control Over Financial Reporting

          Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures specified in Rule 13a-15(f)(1)-(3) of the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

          Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management has concluded that, as of December 31, 2010, our internal control over financial reporting was effective based on that framework.

          Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2010, as stated in their report, which is included within this prospectus.

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BUSINESS

Our Company

          Based on our worldwide network of more than 7,200 locations and our GNC.com website, we believe we are the leading global specialty retailer of health and wellness products, including VMHS products, sports nutrition products and diet products. Our diversified, multi-channel business model derives revenue from product sales through domestic company-owned retail stores, domestic and international franchise activities, third-party contract manufacturing, e-commerce and corporate partnerships. We believe that the strength of our GNC brand, which is distinctively associated with health and wellness, combined with our stores and website, give us broad access to consumers and uniquely position us to benefit from the favorable trends driving growth in the nutritional supplements industry and the broader health and wellness sector. Our broad and deep product mix, which is focused on high-margin, premium, value-added nutritional products, is sold under our GNC proprietary brands, including Mega Men®, Ultra Mega®, GNC WELLbeING®, Pro Performance®, Pro Performance® AMP and Longevity Factors™, and under nationally recognized third-party brands.

          Based on the information we compiled from the public securities filings of our primary competitors, our network of domestic retail locations is approximately twelve times larger than the next largest U.S. specialty retailer of nutritional supplements and provides a leading platform for our vendors to distribute their products to their target consumer. Our close relationship with our vendor partners has enabled us to negotiate first-to-market opportunities. In addition, our in-house product development capabilities enable us to offer our customers proprietary merchandise that can only be purchased through our locations or on our website. Since the nutritional supplement consumer often requires knowledgeable customer service, we also differentiate ourselves from mass and drug retailers with our well-trained sales associates who are aided by in-store technology. We believe that our expansive retail network, differentiated merchandise offering and quality customer service result in a unique shopping experience that is distinct from our competitors.

          We have grown our consolidated revenues from $1,317.7 million in 2005 to $1,822.2 million in 2010, representing a compound annual growth rate ("CAGR") of 6.7%. We have achieved domestic company-owned retail same store sales growth for 22 consecutive quarters. EBITDA has grown from $113.2 million in 2005 to $259.4 million in 2010, representing a CAGR of 18.0%. EBITDA as a percentage of revenue has increased 560 basis points from 8.6% in 2005 to 14.2% in 2010. For a reconciliation of EBITDA to net income see "Selected Consolidated Financial Data".

Corporate History

          We are a holding company and all of our operations are conducted through our operating subsidiaries.

          Together with our wholly owned subsidiary GNC Acquisition Inc., we entered into the Merger Agreement with GNC Parent Corporation on February 8, 2007. On March 16, 2007, the Merger was consummated. Pursuant to the Merger Agreement, as amended, GNC Acquisition Inc. was merged with and into GNC Parent Corporation, with GNC Parent Corporation as the surviving corporation. Subsequently on March 16, 2007, GNC Parent Corporation was converted into a Delaware limited liability company and renamed GNC Parent LLC.

          As a result of the Merger, we became the sole equity holder of GNC Parent LLC and the ultimate parent company of both GNC Corporation and Centers. Our outstanding capital stock is beneficially owned by Ares and OTPP, certain institutional investors, certain of our directors, and certain former stockholders of GNC Parent Corporation, including members of our management. Refer to "Principal and Selling Stockholders" included in this prospectus for additional information.

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          We and certain of our stockholders are party to a stockholders agreement which was restated and amended on February 12, 2008 (the "Amended and Restated Stockholders Agreement"). Among other things, the Amended and Restated Stockholders Agreement contains certain restrictions on transfer of our capital stock, and provides that each of Ares and OTPP has the right to designate four members of our board of directors (or, at the option of each, five members of the board of directors, one of which shall be independent) for so long as they or their respective affiliates each own a certain percentage of our outstanding common stock. Under the New Stockholders Agreement to be entered into among the Sponsors and us, effective upon completion of this offering, the Sponsors will have the right to nominate to our board of directors, subject to their election by our stockholders, so long as the Sponsors collectively own more than 50% of the then outstanding shares of our common stock, the greater of up to nine directors and the number of directors comprising a majority of our board and, subject to certain exceptions, so long as the Sponsors collectively own 50% or less of the then outstanding shares of our common stock, that number of directors (rounded up to the nearest whole number or, if such rounding would cause the Sponsors to have the right to elect a majority of our board of directors, rounded to the nearest whole number) that is the same percentage of the total number of directors comprising our board as the collective percentage of common stock owned by the Sponsors. Under the New Stockholders Agreement, each Sponsor will also agree to vote all of the shares of Class A common stock held by it in favor of the other Sponsor's nominees. The New Stockholders Agreement will also provide that, so long as the Sponsors collectively own more than one-third of our outstanding common stock, certain significant corporate actions will require the approval of at least one of the Sponsors. For additional information, see "Certain Relationships and Related Transactions — Director Independence" and "— Stockholders Agreements".

          GNC Parent Corporation was formed as a Delaware corporation in November 2006 to acquire all the outstanding common stock of GNC Corporation.

          Centers was formed in October 2003 and GNC Corporation was formed as a Delaware corporation in November 2003 by Apollo and members of our management to acquire General Nutrition Companies, Inc. from Numico USA, Inc., a wholly owned subsidiary of Koninklijke (Royal) Numico N.V. (collectively, "Numico"). In December 2003, Centers purchased all of the outstanding equity interests of General Nutrition Companies, Inc. In connection with a corporate reorganization, General Nutrition Companies, Inc. was merged with and into Centers in December 2008, with Centers surviving the merger.

          General Nutrition Companies, Inc. was founded in 1935 by David Shakarian who opened its first health food store in Pittsburgh, Pennsylvania. Since that time, the number of stores has continued to grow, and General Nutrition Companies, Inc. began producing its own vitamin and mineral supplements as well as foods, beverages, and cosmetics. General Nutrition Companies, Inc. was acquired in August 1999 by Numico Investment Corp. and, prior to its acquisition, was a publicly traded company listed on the Nasdaq National Market.

          As of March 11, 2011, Ares and OTPP, each of which is a selling stockholder in this offering, held 33,539,898 shares and 14,581,393 shares, respectively, of our Class A common stock, representing approximately 57% and 25%, respectively, of our outstanding Class A common stock, and OTPP held 28,168,561 shares of our Class B common stock, representing 100% of our outstanding Class B common stock. After giving effect to this offering, Ares and OTPP will hold 31,157,483 shares and 23,610,082 shares, respectively, of our Class A common stock, representing approximately 36% and 27%, respectively, of our outstanding Class A common stock, and OTPP will hold 16,103,245 shares of our Class B common stock, representing 100% of our outstanding Class B common stock. If the underwriters fully exercise their option to purchase additional shares, Ares and OTPP will hold 29,865,918 shares and 24,284,790 shares, respectively, of our Class A common stock, representing approximately 33% and 27%, respectively, of our outstanding Class A

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common stock, and OTPP will hold 13,782,311 shares of our Class B common stock, representing 100% of our outstanding Class B common stock. See "Principal and Selling Stockholders."

Corporate Structure

          The following diagram depicts our corporate structure.

GRAPHIC


    (1)
    Material operating divisions of General Nutrition Corporation include company-owned stores, domestic and international franchising (other than Canada), distribution, e-commerce, manufacturing and construction.

    (2)
    General Nutrition Investment Company is the owner of all of our trademarks and servicemarks.

    (3)
    General Nutrition Centres Company directly operates our stores in Canada and our Canadian franchising.

Recent Transformation of GNC

          Beginning in 2006, we executed a series of strategic initiatives to enhance our existing business and growth profile. Specifically, we:

    Assembled a world-class management team.    We made key senior management upgrades with talented and seasoned executives who have significant retail, international and consumer packaged-goods expertise to complement the existing leadership of GNC and to establish a foundation for growth and innovation.

    Adopted a comprehensive approach to brand building and the retail experience.    We have modernized GNC's brand image, product packaging and media campaigns, and enhanced the in-store shopping experience for our customers.

    Increased focus on proprietary product development and innovation to drive growth in retail sales.    We have increased revenue contribution from proprietary product lines through a series of successful GNC-branded product launches (Vitapak®, Pro Performance® AMP, and GNC WELLbeING®), as well as recent launches of preferred third-party product offerings.

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    Restaged e-commerce business.    We executed an overall site redesign in September 2009 in an effort to increase traffic and conversion rates, while enhancing overall functionality of the site. We believe this redesign has positioned GNC.com to continue capturing market share within one of the fastest growing channels of distribution in the U.S. nutritional supplements industry.

    Invested capital to support future growth.    During 2008 and 2009, we upgraded our point-of-sale systems to improve retail business processes, customer data collection and associate training, and to enhance the customer experience. In 2008, we also invested in our Greenville, South Carolina manufacturing facility to add capacity with respect to our soft gelatin capsule production and vitamin production and enhanced our packaging capabilities.

    Launched partnership programs designed to leverage GNC's brand strength.    In 2010, we partnered with PepsiCo to support its launch of Gatorade G Series Pro and to develop a new brand of fortified coconut water called Phenom, which we expect to be available to consumers in 2011, and with PetSmart to launch an exclusive line of GNC-branded pet supplements.

Industry Overview

          We operate within the large and growing U.S. nutritional supplements industry. According to Nutrition Business Journal's Supplement Business Report 2010, our industry generated $26.9 billion in sales in 2009 and an estimated $28.7 billion in 2010, and is projected to grow at an average annual rate of approximately 5.3% through 2015. Our industry is highly fragmented, and we believe this fragmentation provides large operators, like us, the ability to compete more effectively due to scale advantages. We generate a significant portion of our sales revenue from strong performing sports nutrition and VMHS products.

          According to Nutrition Business Journal, sports nutrition products represented approximately 10.9% of the total U.S. nutritional supplements industry in 2009, and the category is expected to grow at a 7.2% CAGR from 2010 to 2015, representing the second-fastest growing product category in the nutritional supplements industry. By way of comparison, sports nutrition products, grouped in a manner consistent with Nutrition Business Journal's data, generated approximately 43% of our company-owned retail sales for 2010.

          According to Nutrition Business Journal, VMHS products represented approximately 60.8% of the total U.S. nutritional supplements industry in 2009, and the category is expected to grow at approximately a 5.3% CAGR from 2010 to 2015. By way of comparison, VMHS products, grouped in a manner consistent with Nutrition Business Journal's data, generated approximately 40% of our company-owned retail sales for 2010.

          We expect several key demographic, healthcare, and lifestyle trends to drive the continued growth of our industry. These trends include:

    Increasing awareness of nutritional supplements across major age and lifestyle segments of the U.S. population.    We believe that, primarily as a result of increased media coverage, awareness of the benefits of nutritional supplements is growing among active, younger populations, providing the foundation for our future customer base. In addition, the average age of the U.S. population is increasing and data from the United States Census Bureau indicates that the number of Americans age 65 or older is expected to increase by approximately 52% from 2000 to 2015. We believe that these consumers are likely to increasingly use nutritional supplements, particularly VMHS products, and generally have higher levels of disposable income to pursue healthier lifestyles.

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    Increased focus on fitness and healthy living.    We believe that consumers are trying to lead more active lifestyles and becoming increasingly focused on healthy living, nutrition and supplementation. According to the Nutrition Business Journal's 2010 Supplement Business Report, 18% of the United States adult population were regular or heavy users of vitamins in 2009, up from 15% in 2008. We believe that growth in our industry will continue to be driven by consumers who increasingly embrace health and wellness as an important part of their lifestyles.

          Participants in our industry include specialty retailers, supermarkets, drugstores, mass merchants, multi-level marketing organizations, online retailers, mail-order companies and a variety of other smaller participants. The nutritional supplements sold through these channels are divided into four major product categories: VMHS; sports nutrition products; diet products; and other wellness products. Most supermarkets, drugstores, and mass merchants have narrow nutritional supplement product offerings limited primarily to simple vitamins and herbs, with less knowledgeable sales associates than specialty retailers. We believe that the market share of supermarkets, drugstores, and mass merchants over the last five years has remained relatively constant.

Competitive Strengths

          We believe we are well-positioned to capitalize on favorable industry trends as a result of the following competitive strengths:

    Highly-valued and iconic brand.    According to a Beanstalk Marketing and LJS & Associates research study commissioned by us, we hold an 87% brand awareness rate with consumers, which we believe is significantly higher than our direct competitors. We believe our broad portfolio of proprietary products, which are available only in our locations or on GNC.com, advance GNC's brand presence and our general reputation as a leading retailer of health and wellness products. We recently modernized the GNC brand in an effort to further advance its positioning. We have launched enhanced advertising campaigns, in-store signage and product packaging with a focus on engaging our targeted customers, building the brand, and reinforcing GNC's credibility with consumers.

    Our large customer base includes approximately 4.9 million active Gold Card members in the United States and Canada who account for over 50% of company-owned retail sales. Our Gold Card members spend on average two times more than other GNC customers and generally make purchases over a range of product categories. We believe that our customer base is attractive as our shoppers tend to be gender balanced, relatively young, well-educated and affluent. We believe that our efforts to provide a comprehensive shopping experience have been effective. Based on our Gold Card Program data, customers ages 19 to 29 years old represented approximately 26% of our sales in 2010, which is an increase of 8% from 2006. Recent surveys, commissioned by GNC, reflect a high satisfaction rate among GNC's shoppers with respect to selection, product innovation, quality, and overall experience.

    Commanding market position in an attractive and growing industry.    Based on our broad global footprint of more than 7,200 locations in the United States and 46 international countries (including distribution centers where retail sales are made), and on GNC.com, we believe we are the leading global specialty retailer of health and wellness products within a fragmented industry. With a presence in all 50 states, our domestic retail network is approximately twelve times larger than the next largest U.S. specialty retailer of nutritional supplements, based on the information we compiled from the public securities filings of our primary competitors. We believe our multi-channel business model will enable us to take

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      advantage of international expansion opportunities through franchising activities, direct or joint venture investment opportunities, and alternative distribution opportunities.

    Unique product offerings and robust innovation capabilities.    Product innovation is critical to our growth, brand image superiority and competitive advantage. Our proprietary brands and certain third-party products for which we have preferred distribution rights represented approximately 61.7% of company-owned retail revenue in 2010. We have internal product development teams located in our corporate headquarters in Pittsburgh, Pennsylvania and our manufacturing facility in Greenville, South Carolina, which collaborate on the development and formulation of proprietary nutritional supplements with a focus on high growth categories. We seek to maintain the pace of GNC's proprietary product innovation to stay ahead of our competitors and provide consumers with unique reasons to shop at our stores. Our in-house product development teams and vertically integrated infrastructure enable us to quickly take a concept for a new product from the idea stage, to product development, to testing and trials, and ultimately to the shelf to be sold to our customers. In 2010, we believe GNC-branded products generated more than $850 million of retail sales across company-owned and domestic franchise stores, GNC.com and Rite Aid store-within-a-store locations.

    Over the last two years, we have launched a series of new products that have increased the revenue contribution from GNC's proprietary product lines. We extended our line of proprietary pocket-sized pack of nutritional supplements called Vitapak®, more than doubling the existing stock keeping unit ("SKU") count by including lines of customized, condition-specific formulas. We also launched an internally developed line of premium vitamins and other products, specifically designed for women, under the brand GNC WELLbeING®. In addition, we launched Pro Performance® AMP, a premium line of sports nutrition products targeted at a broad-based, fast-growing fitness consumer segment.

    Our strong vendor relationships and large retail footprint ensure our retail stores frequently benefit from preferred distribution rights on certain new third-party products making our stores a destination for consumers seeking these products. We believe we are considered the retailer of choice by many vendors in the health and wellness industry to launch their new products due to our knowledgeable store associates and broad customer base. In March 2010, PepsiCo launched Gatorade G Series Pro through a distribution alliance with GNC. We believe PepsiCo recognized the value inherent in our broad retail footprint and strong presence in the sports nutrition marketplace when selecting us to help introduce its premium line of sports nutrition and hydration products to consumers.

    Diversified business model.    Our multi-channel approach is unlike many other specialty retailers as we derive revenues across a number of distribution channels in multiple geographies, including retail sales from company-owned retail stores (including 117 stores on U.S. military bases), retail sales from GNC.com, royalties, wholesale sales, and fees from both domestic and international franchisees, revenue from third-party contract manufacturing, and wholesale revenue and fees from our Rite Aid store-within-a-store locations. Our business is further diversified by our broad merchandise assortment. Our retail stores generally offer over 1,800 SKUs across multiple product categories. Our diverse sources of revenue help provide stability to our earnings and provide management numerous avenues through which they can pursue growth opportunities.

    Vertically integrated operations that underpin our business strategy.    To support our company-owned and franchise global store base, we have developed sophisticated manufacturing, warehousing and distribution facilities. These consist of a manufacturing facility in Greenville, South Carolina, distribution facilities in Leetsdale, Pennsylvania,

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      Anderson, South Carolina, and Phoenix, Arizona, and a transportation fleet of over 100 delivery trucks and trailers. Our vertically integrated business model allows us to control the production and timing of new product introductions, control costs, maintain high standards of product quality, monitor delivery times, manage inventory levels and enhance profitability. We also are able to react to trends in the industry and produce at a low cost a variety of products with different quantities, sizes, and packaging configurations while maintaining strict levels of quality control. In addition, our vertically integrated business model, combined with our broad retail footprint, enables us to respond quickly to changes in consumer preferences and maintain a high pace of product innovation. We are also able to leverage our manufacturing capabilities and third-party contract manufacturing business to absorb fixed costs at our manufacturing facilities, which enables us to maintain high margins on proprietary lines sold at GNC locations.

    Differentiated service model that fosters a "selling" culture and an exceptional customer experience.    We believe we distinguish ourselves from mass and drug retailers with our well-trained sales associates, who offer educated service and trusted advice. We invest considerable capital and human resources in providing comprehensive associate training. Our upgraded point-of-sale systems functions as a means to communicate products and corporate news, and to provide access to training modules, leading to a more knowledgeable workforce and greater customer satisfaction. We believe that our expansive retail network, differentiated merchandise offering and quality customer service result in a unique shopping experience.

    World-class management team with a proven track record.    Our highly experienced and talented management team has a unique combination of leadership and experience across the retail and consumer packaged-goods industries. Our team has successfully executed on key growth initiatives while effectively managing the business in a difficult economic environment. Since 2006, GNC has complemented strong legacy talent by adding or upgrading personnel in several senior leadership positions, including President, Chief Operating Officer, Chief Financial Officer and Chief Legal Officer, and in the areas of merchandising, marketing and branding and e-commerce.

          As a result of our competitive strengths, we have maintained consistent revenue growth through the recent economic cycle. The fourth quarter of 2010 marked the 22nd consecutive quarter of positive domestic company-owned same store sales growth. The strength and stability of our core business has resulted in part from industry growth in our key product categories, VMHS and sports nutrition, and from our efforts to increase market share across multiple distribution channels and geographies.

          Our consistent growth in company-owned retail sales, the positive operating leverage generated by our retail operations, cost containment initiatives, as well as growth in our other channels of distribution, have allowed us to expand our EBITDA margin. EBITDA as a percentage of revenue has increased 560 basis points from 8.6% in 2005 to 14.2% in 2010. For a reconciliation of EBITDA to net income see "Selected Consolidated Financial Data".

          We expect that our existing store base and established distribution network can continue to be effectively leveraged to support higher sales volumes. We also believe the strength of our brand and our vertical integration will allow us to continue earning attractive product margins, particularly on proprietary products. GNC's franchise model enables us to maintain a global retail footprint, while minimizing the amount of required capital investment. Furthermore, our revenue mix from franchisee operations includes wholesale product sales, royalties, and fees, which we believe represent recurring, high-margin streams of income.

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Our Growth Strategy

          We plan to execute several strategies in the future to promote growth in revenue and operating income, and capture market share, including:

    Growing company-owned domestic retail earnings.    We believe growth in our domestic retail business will be supported by continued same store sales growth and positive operating leverage. The fourth quarter of 2010 marked our 22nd consecutive quarter of positive domestic company-owned same store sales growth. We believe the industry growth in VMHS and sports nutrition, fueled by the continued expansion of a consumer base focused on health and wellbeing, return on investment from our brand building initiatives, future proprietary product introductions, and potential improvements in mall traffic trends will support our continued positive same store sales growth. Our existing store base and the supporting infrastructure provide us the ability to convert a high percentage of our incremental sales volume into operating income, providing the opportunity to further expand our company-owned retail operating income margin.

    Growing domestic company-owned retail square footage.    We are developing a comprehensive approach to our real estate strategy in an effort to maximize market share in key metropolitan statistical areas ("MSAs"). For 2011, we expect to grow domestic company-owned retail square footage by approximately 3% to 4%, including the opening of approximately 100 new domestic company-owned stores. Based upon our operating experience and research commissioned by us and conducted for us by The Buxton Company, a customer analytics research firm, we believe that the U.S. market can support a significant number of additional GNC stores, with at least 4,500 total potential domestic company-owned and franchise stores (excluding Rite Aid store-within-a-store locations). This analysis supports our strategy of steadily adding company-owned domestic stores to our retail network.

    We are testing new store formats designed in collaboration with the Arnell Agency. These prototypes have been developed in an effort to (i) enhance the consumer's shopping experience with a larger and more modern, functional store layout and an enhanced assortment of merchandise, and (ii) secure major trade area market share with high visibility, high traffic retail locations that build on the consumer's perception of the GNC brand as a destination for health and wellness. The new store formats will showcase the GNC brand and will range in size from approximately 2,000 square feet to 3,000 square feet depending on the location. We believe the new store formats will complement our existing 1,500 square foot "modern-design" stores in our traditional real estate locations, such as malls and in-line strip centers.

    GNC's existing "modern-design" store format, which is expected to be used in the majority of our new store openings in 2011, requires approximately $150,000 of initial investment, consisting of approximately $85,000 of capital expenditure and approximately $65,000 of working capital. "Modern-design" store formats are generally cash flow positive in the first year of operation, generally pay back capital expenditure in two to three years and offer an attractive return on investment.

    Growing our international footprint.    Our international business has been a key driver of growth in recent years. We plan to continue expanding our international franchise network. On average, over 100 net new international franchise stores have opened annually over the last five years, most resulting from our franchisees satisfying their contractual obligations. From 2005 to 2010, our international franchise revenue grew at an 18% CAGR, driven by new store openings and same store sales growth, increasing both royalties and wholesale revenue

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      generated by GNC. We expect to continue capitalizing on international revenue growth opportunities through additions of franchise stores, direct investment in high growth markets and expansion of product distribution in both existing and new markets. For example, we believe China's nutritional supplements market represents a significant growth opportunity. In 2010, one of our subsidiaries commenced the process of registering products and initiating wholesale sales and distribution in China. Through our expansion efforts, we expect, over time, to be positioned to execute a multi-channel growth strategy in China, including stand-alone stores, store-within-a-stores, wholesale, and potentially identifying a partner to pursue direct marketing. See "Risk Factors — Risks Relating to Our Business and Industry" included elsewhere in this prospectus.

    Expanding our e-commerce business.    We believe GNC.com is positioned to continue capturing market share online, which represents one of the fastest growing channels of distribution in the U.S. nutritional supplements industry. In September 2009, we re-launched GNC.com, after making a significant investment in the development of the site, with the objective of increasing traffic, conversion rates, and functionality. Our site redesign has allowed for an enhanced online customer experience, driving traffic through better natural search, easier navigation, and expanded content, and Internet Retailer magazine selected GNC.com for its 2010 annual list of Hot 100 online retail sites. We intend to continue to capitalize on the growth of GNC.com and we may explore opportunities to acquire additional web banners to expand our online market share.

    Further leveraging of the GNC brand.    As with our Rite Aid partnership, we believe we have the opportunity to create incremental streams of revenue and grow our customer base by leveraging the GNC brand outside of our existing distribution channels through corporate partnerships. We expect these partnerships to include relationships with well-known national specialty retailers and club stores in addition to partnerships with leading consumer brand companies to sell our proprietary products. Consistent with this strategy, in September 2010, PetSmart introduced a line of GNC-branded pet supplements exclusively at PetSmart stores. Under this arrangement, GNC-branded products replaced all PetSmart branded pet-supplement products. For a modest investment, this partnership positions GNC to benefit from the growth trends in the pet-care industry, while expanding the number of consumers who purchase GNC-branded products. In November 2010, building on the Gatorade G Series Pro launch, we partnered with PepsiCo to develop a new brand of fortified coconut water called Phenom, which we expect to be available to consumers in 2011.

Business Overview

          The following charts illustrate the percentage of our net revenue generated by our three segments and the percentage of our net U.S. retail nutritional supplements revenue generated by our product categories as of December 31, 2010:

Net Revenue by Segment

CHART

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US Retail Revenue by Product

CHART

          Throughout 2010, we did not have a material concentration of sales from any single product or product line.

Retail Locations

          As of December 31, 2010, there were 7,260 GNC store locations globally, including:

    2,748 company-owned stores in the United States (all 50 states, the District of Columbia, and Puerto Rico);

    169 company-owned stores in Canada;

    903 domestic franchise stores;

    1,437 international franchise stores in 46 countries (includes distribution centers where retail sales are made); and

    2,003 GNC franchise "store-within-a-store" locations under our strategic alliance with Rite Aid Corporation ("Rite Aid").

          Most of our company-owned and franchise U.S. stores are between 1,000 and 2,000 square feet and are primarily located in shopping malls and strip shopping centers. Based on the information we compiled from the public securities filings of our primary competitors, we have approximately twelve times the domestic store base of our nearest U.S. specialty retail competitor.

Website

          In December 2005, we started selling products through our website, GNC.com, and re-launched the platform in September 2009, with the overall objective of increasing traffic, conversion rates, and functionality. This additional sales channel has enabled us to market and sell our products in regions where we have limited or no retail operations. Some of the products offered on our website may not be available at our retail locations, enabling us to broaden the assortment of products available to our customers. The ability to purchase our products through the internet also offers a convenient method for repeat customers to evaluate and purchase new and existing products. Internet purchases are fulfilled and shipped directly from our distribution centers to our consumers using a third-party courier service. To date, we believe that most of the sales generated by our website are incremental to the revenues from our retail locations.

Franchise Activities

          We generate income from franchise activities primarily through product sales to franchisees, royalties on franchise retail sales, and franchise fees. To assist our franchisees in the successful operation of their stores and to protect our brand image, we offer a number of services to franchisees including training, site selection, construction assistance and accounting services. We believe that our franchise program enhances our brand awareness and market presence and will enable us to continue to expand our store base internationally with limited capital expenditures. Over the last several years, we realigned our domestic franchise system with our corporate

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strategies and re-acquired or closed unprofitable or non-compliant franchise stores in order to improve the financial performance of the franchise system.

Franchise Store-Within-a-Store Locations

          To increase brand awareness and promote access to customers who may not frequent specialty nutrition stores, we entered into a strategic alliance in December 1998 with Rite Aid to open our GNC franchise store-within-a-store locations. Through this strategic alliance, we generate revenues from fees paid by Rite Aid for new store-within-a-store openings, sales to Rite Aid of our products at wholesale prices, the manufacturing of Rite Aid private label products and retail sales of certain consigned inventory. In 2007, we extended our alliance with Rite Aid through 2014 with a five-year option. At December 31, 2010, Rite Aid had opened 848 of an additional 1,125 stores that Rite Aid committed to open by December 31, 2014.

Marketing

          We market our proprietary brands of nutritional products through an integrated marketing program that includes internet, print, and radio media, storefront graphics, direct mailings to members of our Gold Card loyalty program, and point of purchase promotional materials.

Manufacturing and Distribution

          With our sophisticated manufacturing and distribution facilities supporting our retail stores, we are a vertically integrated producer and supplier of high-quality nutritional supplements. By controlling the production and distribution of our proprietary products, we can control product quality, monitor delivery times and maintain appropriate inventory levels. In addition, our broad retail footprint provides a captive network for the introduction of new proprietary products. Our partnership with PetSmart will enable us to leverage our existing manufacturing and distribution capabilities and extend the GNC brand into the pet care market.

Products

          We offer a wide range of high-quality nutritional supplements sold under our GNC proprietary brand names, including Mega Men®, Ultra Mega®, GNC WELLbeING®, Pro Performance®, Pro Performance® AMP, Longevity Factors™ and Preventive Nutrition®, and under nationally recognized third-party brand names. We report our sales in four major nutritional supplement categories: VMHS; sports nutrition; diet; and other wellness. In addition, our retail stores offer an extensive mix of brands, including over 1,800 SKUs across multiple categories and products. This variety is designed to provide our customers with a vast selection of products to fit their specific needs and to generate a high number of transactions with purchases from multiple product categories. Sales of our proprietary brands at our company-owned stores represented approximately 55%, 56% and 51% of our net retail product revenues for the years ended December 31, 2010, 2009 and 2008, respectively. We have arrangements with our vendors to provide third-party products on an as needed basis. We are not dependent on any one vendor for a material amount of our third-party products.

          Consumers may purchase a GNC Gold Card in any U.S. GNC store or at GNC.com for $15.00. A Gold Card allows a consumer to save 20% on all store and online purchases on the day the card is purchased and during the first seven days of every month for a year. Gold Card members also receive personalized mailings and e-mails with product news, nutritional information, and exclusive offers.

          Products are delivered to our retail stores through our distribution centers located in Leetsdale, Pennsylvania; Anderson, South Carolina; and Phoenix, Arizona. Our distribution centers

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support our company-owned stores as well as franchise stores and Rite Aid locations. Our distribution fleet delivers our finished goods and third-party products through our distribution centers to our company-owned and domestic franchise stores on a weekly or biweekly basis depending on the sales volume of the store. Each of our distribution centers has a quality control department that monitors products received from our vendors to ensure they meet our quality standards.

          Based on data collected from our point-of-sales systems, below is a comparison of our company-owned domestic retail product sales by major product category, and the percentages of our company-owned domestic retail product sales for the years shown: