Vitamin Shoppe Short Sell Synopsis
Vitamin Shoppe's stock had been slowly trending downward in 2016 and early 2017. The stock had been trading/valued based on mixed views on the company's ability to show continued revenue and earnings growth in a difficult retail environment. The overall retail space and GNC's difficulties were certainly weighing on Vitamin Shoppe's stock in 2016 and early 2017.
In order to assess Vitamin Shoppe's economics, we conducted the following investigative tasks:
In-depth discussions with management and competing firms
Statistically significant surveys of locations across the country
Analyzed web traffic data on Amazon's Alexa suite
The results of our research supported the view that Vitamin Shoppe was employing the same broken business model that got GNC into trouble. The pricing was inconsistent, higher than Amazon and others, stores were confusing, and products were not differentiated. When the company reported earnings on 5/10/17 the stock lost over 30% of its value that day and has since lost considerably more of its value.