NBTY Targets Unleashing Growth From Private Label Drag
This article was originally published in The Tan Sheet
“Where we have opportunities to hold on to” private label business, “we'll hold on to it, but not at any cost,” says President and CEO Steve Cahillane. “Due to private label margins” becomes common refrain in NBTY’s income downturn.
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The private equity firm’s H.I.G. Growth Partners capital investment affiliate merges two of its businesses, Integrity Nutraceuticals and Cornerstone Research & Development, into Capstone Nutrition. CEO Greg Horn says “we really occupy a niche” in “a pretty fragmented industry” with custom formulations for every product.
NBTY prioritizes development of sports nutrition products and wants to broaden the category as it increases its focus on branded sales due to competitive pressure in the private label space.
Dietary supplement manufacturer NBTY's gross margins are unlikely to exceed 50 percent again largely because private-label product sales have nearly doubled since its acquisition of Leiner Health Products