By Glenn Singer and Marcia Heroux Pounds, Sun Sentinal, Business Writers, July 26 2003
NBTY Inc. completed its $250 million acquisition of Boca Raton-based vitamin and supplement maker Rexall Sundown Inc. from the Dutch firm Royal Numico NV on Friday and promptly terminated about 200 workers, company employees said.
Those who lost their jobs included the chief executive officer, Ralph Denisco, several senior managers and employees in the marketing, sales, finance, information technology and legal departments.
Bohemia, N.Y.-based NBTY, which produces vitamins under the Nature's Bounty brand and operates Vitamin World stores, has told analysts that keeping many of the Boca Raton workers could create needless and costly duplication of services.
About 1,000 people work for Rexall Sundown in South Florida. The company was started by Carl DeSantis as a mail-order vitamin business in 1975 and acquired the Rexall name in 1986. Rexall Sundown went public in 1993 and then was sold to Royal Numico for $1.8 billion three years ago.
"I don't think this was unexpected, though it's always a shock when it happens," said Carol Walters, who until Thursday was the Rexall Sundown spokeswoman. Like the others, she said, she was given a severance package.
"They believe in moving fast," Walters said of the NBTY management. The company president, Harvey Kamil, was not available for comment, nor was the executive at the public relations firm G.S. Schwartz & Co., which handles the NBTY account.
While the exact number is not known, about 150 employees at headquarters lost their jobs, according to a five-year employee on the transition team who asked that he not be named. Rexall Sundown operates about a half-dozen other sites in South Florida.
The employee said those terminated were offered severance of two weeks' pay for every year they had worked at Rexall Sundown, plus pay for unused vacation.
The employee said he thought it could take anywhere from two to seven months to merge the Rexall and NBTY operations. The new owner has not said whether Rexall Sundown would maintain a headquarters in Boca Raton.
Under the Worker Notification and Retraining Act, employers must give 60 days' notice of a layoff to community leaders. It was unclear whether the company had filed a notice.
Boca Raton Mayor Steven Abrams said City Hall had not received a WARN notice, and that he was saddened to learn of NBTY's action.
"It's tough to lose such a group of professionals," Abrams said. "Hopefully, a lot of these people will be able to latch on to jobs with other companies in the area."
Half a dozen of them already have found employment at vitamin retailer vitacost.com in Boynton Beach, said Wayne Gorsek, the chief executive officer. The company has hired a chief financial officer, a human relations specialist, a computer programmer and others who lost their jobs at Rexall Sundown, he said.
Gorsek, whose firm sells vitamins on the Internet and through a catalog, said he learned from discussions with former employees that Rexall Sundown had terminated slightly more than 200 employees.
"It's a sad situation, but we have been extremely fortunate to get this talent on board," Gorsek said.
A lot of people at Rexall Sundown probably were shocked by the terminations because NBTY's top executives "created the impression they would be open and out front with them," said Brian Neff, spokesman for the South Florida Manufacturers Association in Pompano Beach.
"I fear this will be another headquarters operation in South Florida that's leaving," Neff said. "It hurts the community because this company, dating to the days when it was run by the DeSantis family, was really involved in the community and philanthropy."
Glenn Singer can be reached at gsinger@sun-sentinel.com or 561-243-6612.