Vitamin Cottage takes on 'extended family' of investors with IPO.

• Author: Taylor, Mike
• Position: BUSINESS as usual

VITAMIN COTTAGE NATURAL FOOD MARKETS boasts 57 stores in 11 states, and the Lakewood-based chain now has the capital to expand much more after an initial public offering in July that raised $100 million.

Founded as a door-to-door business in Golden in 1955 by Margaret Isely, Vitamin Cottage has been one of Colorado's most enduring and successful family enterprises. And despite going public it will continue to be family-operated, as family members still control 60 percent of the company.

Fittingly, 10 family members were on hand on the New York Stock Exchange trading floor on July 25 for Vitamin Cottage's IPO. Margaret Isley's son Kemper Isley, his daughter Raquel and his sister Heather rang the opening bell together, signaling a new era for the company that now trades under the ticker symbol NGVC.

It also signaled the end of a grueling two-week "road show" for Kemper Isley, who shares the title covice president with his brother, Zephyr.

"You go from one city to another city, and essentially you have meetings starting at 7 o'clock in the morning and you end at about 7 o'clock at night," Kemper Isely said. "You have a meeting almost every hour. You meet mainly with fund investors and wealth advisers and explain the business to them. You do that nine to 10 times a day."

The most frequent questions had to do with the Vitamin Cottage shopping experience and sizing up the threat posed by the much bigger--and pricier--Whole Foods Market, which has 329 stores in the U.S., Canada and the United Kingdom.

Vitamin Cottage plans to add 10 stores this year and secs an ultimate potential for 1,100 locations, though Kemper Isely said they plan to limit expansion to the west side of the Mississippi River for the next five years.

"There isn't really a concept like ours on a national level," Kemper Isely said, "so you were always describing what a shopping experience is like at our stores. Then of course everybody was concerned that Whole Foods was going to trample us. So just getting people to understand what we are about was probably the hardest thing."

Vitamin Cottage's sales breakdown is about 60 percent grocery, 27-29 percent supplements and 13 percent non-food items. While some investment analysts see Whole Foods as a direct competitor--citing reports that the Austin-based chain is considering introducing smaller stores in smaller markets--Isely describes Whole Foods as "complementary and synergistic" to Vitamin Cottage. Indeed, three years ago in a...