Bear Stearns Merchant Banking Announces Purchase Of Vitamin Shoppe.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 2, 2002

Bear Stearns Merchant Banking announced today that it has acquired Vitamin Shoppe Industries Inc., a privately held retailer and direct marketer of vitamins, minerals, supplements and other nutritional products. Started

in 1977 as a corner shop in New York City by its founder and current Chief Executive Officer Jeff Horowitz, the company has grown rapidly over the past five years and now operates 120 retail stores in 14 states and Washington DC, along with a nationally distributed catalog and an industry-leading Internet operation. Terms of the transaction were not disclosed.

Commenting on the acquisition, John Howard, head of Bear Stearns Merchant Banking, said, "The prospect of acquiring Vitamin Shoppe, a solid business with industry leading sales per square foot and a strong, proven management team, is extremely compelling. We feel this acquisition represents a tremendous market opportunity, especially as the US population ages and becomes more health conscious." The acquisition of Vitamin Shoppe represents the third purchase of a retail chain by Bear Stearns Merchant Banking. Two senior managing directors of Bear Stearns Merchant Banking, Doug Korn and Rick Perkal, have joined the Company's board of directors, along with Paul Lehman, a vice president of the group.

Company management, including Mr. Horowitz and Tom Tolworthy, President and Chief Operating Officer, participated in the acquisition and will continue to lead the company. "Tom and I are delighted to be working with Bear Stearns Merchant Banking to build this business into the leading supplement retailer offering the broadest product selection at the most competitive prices. We believe we have a lot to look forward to and that this transaction bodes well for the future of our brand," said Mr. Horowitz.

Vitamin Shoppe Industries Inc. is a privately held New Jersey based retailer and direct marketer of vitamins, minerals, supplements and other nutritional products. Offering an unsurpassed selection of high quality products at discount prices, Vitamin Shoppe sells over 25,000 items from more than 350 leading brands through 120 stores and nationally through its Internet and catalog operations.

Senior debt for the transaction was provided by a lender group led by Bear, Stearns & Co. Inc. and BNP Paribas. Subordinated debt was provided by Blackstone Mezzanine Partners L.P.