VitaminShoppe.com Inks Two-Year Deal With AOL

Online vitamin and nutritional supplement retailer VitaminShoppe.com (Nasdaq: VSHP) announced today that it has signed a two-year, multi-million dollar (US$) alliance with America Online (NYSE:AOL).

Under the terms of the deal, VitaminShoppe.com will become an anchor tenant in the “Diet & Nutrition” department of AOL’s [email protected] marketplace. In addition, VitaminShoppe.com will receive gold tenant positions in other [email protected] departments, including “Drugstore & Pharmacy” and “Sports & Fitness.”

The company will also be promoted on other AOL properties, including Compuserve, AOL.com, Digital City and Netscape Netcenter.

“VitaminShoppe.com’s alliance with AOL puts us in an even stronger position in this important winter buying season,” said Kathryn Creech, president and CEO of VitaminShoppe.com.

Big Thanksgiving Week

In terms of traffic, VitaminShoppe.com is already doing well during the holiday shopping season. According to Media Metrix, VitaminShoppe.com was the sixth most visited e-commerce site during the Thanksgiving week, attracting nearly 1.2 million unique users and finishing ahead of Yahoo!’s shopping area and Buy.com.

Meanwhile, competitors such as Drugstore.com and PlanetRx.com were not in the top 10.

Also, VitaminShoppe.com managed to finish behind only Toysrus.com and ahead of barnesandnoble.com as the most trafficked e-commerce site with a brick-and-mortar presence. The site has since fallen on Media Metrix’s listings, but the deal with AOL should give it a boost.

About VitaminShoppe.com

VitaminShoppe.com sells more than 18,000 products from more than 400 brands. Products include vitamins, supplements, nutritional products, personal care, homeopathy, and fitness products. VitaminShoppe.com offers year-round discounts of 20 to 40 percent of retail prices and also features next-day delivery.

The company, which has been around since 1977, also operates 68 brick-and-mortar stores on the East Coast of the United States.

Stock Impact

Shares of VitaminShoppe.com soared in early trading today after the news, gaining 2-1/2 to 14-1/4. The stock has recovered since a lackluster initial public offering performance in October. The company went public at $11 a share on October 8th and closed its first day of trading down 1-1/4 to 9-3/4.

VitaminShoppe.com stock fell as low as 7-1/4 before rebounding.

Investors in VitaminShoppe.com competitor MotherNature.com (Nasdaq: MTHR) are hoping that the MotherNature.com stock will follow a similar path. MotherNature.com, which has CMGI as an investor, went public at $13 a share last Friday.

The stock fell 3/4 to 12-1/4 on its first day of trading and has since traded as low as 8-7/8.

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