NBTY, Inc. (together with its subsidiaries, the "Company," "NBTY," "we," or "us") is a leading global vertically integrated manufacturer, marketer and retailer of a broad line of high quality, value-priced nutritional supplements in the United States and throughout the world. We market approximately 25,000 products under numerous brands, including Nature's Bounty®, Ester-C®, Solgar®, MET-Rx®, American Health®, Osteo Bi-Flex®, Flex-A-Min®, SISU®, Knox®, Sundown®, Rexall®, Pure Protein®, Body Fortress®, WORLDWIDE Sport Nutrition®, Natural Wealth®, Puritan's Pride®, Holland & Barrett®, GNC (UK)®, Physiologics®, Le Naturiste®, De Tuinen®, Julian Graves® and Vitamin World®. Our vertical integration includes purchasing raw materials and formulating and manufacturing products, which we then market through the following four channels of distribution:
Wholesale/US Nutrition operations—distributes products under various US Nutrition brand names and third party private labels, each targeting specific market groups that include mass market retailers, supermarkets, club stores, drugstore chains, pharmacies, health and natural food stores, healthcare practitioners, wholesalers, distributors and international customers;
North American Retail operations—includes 442 Vitamin World stores in the United States and 86 Le Naturiste stores operating in Canada, each selling branded and third-party products;
European Retail operations—includes 537 Holland & Barrett stores in Europe and nine franchise Holland & Barrett stores in South Africa (which we include in this segment), 351 Julian Graves stores, and 31 GNC (UK) stores in the United Kingdom ("UK"); 80 De Tuinen stores (including 19 franchise locations) in the Netherlands; and 24 Nature's Way stores in Ireland, each selling branded and third-party products; and
Direct Response/E-Commerce operations—includes the sale of branded and third-party products primarily through mail order catalogs and the internet.
We operate in the nutritional supplement industry and are organized along our four channels of distribution, which are Wholesale/US Nutrition, North American Retail, European Retail and Direct Response/E-Commerce. The following table sets forth the percentage of net sales for each of our operating segments:
Wholesale/US Nutrition. We market our products under various brand names, each targeting special market groups, which include leading mass merchandisers, club stores, drug store chains and supermarkets, wholesale clubs, independent pharmacies, health food stores, health food store wholesalers, the military and other retailers. We sell Nature's Bounty®, Ester-C®, MET-Rx®, Osteo Bi-Flex®, Flex-A-Min®, Knox®, Sundown®, Rexall®, and Pure Protein® to mass merchandisers, drug store chains, drug wholesalers, supermarket chains and wholesalers. In addition, we manufacture private label brands for many leading retailers. We also sell directly to health and natural food stores under the Solgar®, SISU® and Good 'N Natural® brands, and sell products, including a specialty line of vitamins, to health food wholesalers under our American Health® brand. Additionally, we sell our Physiologics® brand products directly to healthcare practitioners. Over the past several years, we have expanded our international product sales of our U.S. wholesale brands to include many countries throughout Europe, the Middle East, Africa, South and Central America, Asia, the Caribbean Islands and the Pacific Rim countries.
North American Retail. At the end of fiscal 2009, we operated 442 Vitamin World retail stores in regional and outlet malls throughout the United States, and 86 Le Naturiste retail stores throughout Canada. Each store carries a full line of our branded products, as well as products manufactured by others. Nutritional supplement products that we manufactured accounted for approximately 70% of North American Retail's total sales in fiscal 2009. Our direct interaction with our retail customers helps us identify regional buying trends, customer preferences, product acceptances and price trends. We use this information in initiating sales programs and new product introductions for all our divisions. In addition, our direct response segment maintains the website www.vitaminworld.com, which permits our customers to purchase our products through the internet and to locate our retail stores.
European Retail. We generate revenue through the retail operations of 537 Holland & Barrett stores, 351 Julian Graves stores and 31 GNC (UK) stores in the UK, 24 Nature's Way stores in Ireland, and 80 De Tuinen stores in the Netherlands, which include 19 franchised locations. In addition, during fiscal 2009 Holland & Barrett franchised nine locations in South Africa, which we include in this segment. Holland & Barrett, one of the UK's leading nutritional supplement retailers, markets a broad line of nutritional supplement products, including vitamins, minerals and other nutritional supplements. Julian Graves is a UK retailer of nuts, fruits and confectionery goods. GNC (UK) stores specialize in vitamins, minerals and sports nutrition products. Our Nature's Way® product offerings are similar to those of Holland & Barrett. De Tuinen is a leading retailer of health food products, selected confectionery, and lifestyle giftware.
Direct Response/E-Commerce. We offer, through mail order and e-commerce, a full line of vitamins and other nutritional supplement products as well as selected personal care items, under our Puritan's Pride® and other brand names, at prices that are generally at a discount from those of similar products sold in retail stores. Through our Puritan's Pride® brand, we are a leader in the US direct response nutritional supplement industry. We have approximately 2.4 million active customers on our direct-response customer list, with response rates that we believe are above the industry average. We consider customers active if they have purchased our products in the preceding 36 months. In addition, we offer products focusing on our other brands through other direct channel sites, such as www.gnc.co.uk, www.hollandandbarrett.com, www.juliangraves.com, and www.vitaminworld.com. We intend to attract new customers in our direct response operation through aggressive marketing techniques in the United States and around the world, and through selective acquisitions. We regularly update our mail order lists by adding new customers. We believe this maximizes catalog sales while reducing mailing and printing costs. We conduct insert programs with other mail order companies to add new customers to our mailing lists and websites, and to increase the average order size. Our use of state-of-the-art equipment, such as computerized mailing, bar-coded addresses and automated picking and packing systems, enables us to process orders quickly, economically and efficiently. Typically, we fill orders within 24 hours of receipt. Our equipment and expertise also lowers our per-customer distribution costs, thereby enhancing margins and enabling us to lower our prices. Our www.puritan.com website provides a practical and convenient method for consumers wishing to purchase products that promote healthy living. Through this website, consumers have access to more than 2,000 products offered through our Puritan's Pride® mail order catalog.