When Joseph M. Fortunato took over as CEO of General Nutrition Centers Inc. in 2005, conditions at the nutritional supplement company were not ideal. During rapid growth in the 1990s, Fortunato says everyone got a little fat and happy watching the money roll in.
Then the company took a hit in the early 2000s because of a downturn in the diet supplement and low-carb markets. Revenue starting falling, and then in early 2003, GNC instructed its stores to stop selling products containing ephedra, which resulted in $225 million in lost revenue.
“That’s really when we had to go back and just re-evaluate GNC in general — what our goals would be in the short term and the long term and then how would we accomplish those things,” Fortunato says.
On top of those troubles, the company saw five CEOs in 50 months come and go before Fortunato took over. That meant Fortunato, who was chief operating officer before becoming CEO, was essentially doing two jobs.
“We had quite a few changes at the CEO level,” he says. “A lot of what I was doing at that time was partially CEO work at times, because as CEOs came in and out, it was very hard for them to come in right away and assess the business and try to move the business forward because, once again, we are a fairly complex business for a retailer.
“So, I really had to take a point of view that there were things I was going to do to drive the business forward. As CEOs came in, obviously, I was trying to get buy-in from them, but I couldn’t wait until CEOs got up to speed with everything and decided what strategy they wanted to move forward with. Usually, they never got to the point where they were able to implement any of the strategies.”
Eventually, Fortunato became CEO and made his lone mission getting the business back on track by focusing on the core of the business and making the company’s foundation solid.
“Every business has a core component to it,” he says. “When you look and go through all the muddle of everything else that is going on around the business, there are a couple things — the core components of the business — that really, fundamentally drive the business no matter what.”
