In a previous article I wrote covering Rite Aid Corporation (RAD -43.53%), I discussed how well the company's stock has performed year-to-date. Shares of the drugstore retailer are up around 278.6% from the $1.40 per share they started at at the beginning of the year to their most recent price of $5.30. In that article, I discussed the good and bad parts about Rite Aid's current situation, especially relative to its peers. There is something more you should understand about the company that wasn't included in that writing; it has a massive partnership with another retailer that's just one notch removed from its business, GNC Holdings (GNC).

According to the terms of the agreement, Rite Aid has agreed to establish what both companies call a "store-within-a-store" business, whereby GNC will open smaller "stores" inside of Rite Aid stores. Though this may sound a bit odd, the concept of having a store located inside a store has advantages for both Rite Aid and GNC. In addition to utilizing the products both companies have to attract customers who may have only gone to one store or the other, it also gives GNC the ability to have an establishment from which to engage in business without having to go through the cost of setting up an individual location.

Imitation is the best form of flattery
If this type of engagement sounds somewhat familiar to you, then you have probably heard that J.C. Penney Company (JCPN.Q) has been altering its business model of having individual stores with products from various brands inside to one that allows top brands to have their own "store-within-a-store" inside their buildings. This news came as J.C. Penney had been struggling following the company's decision to remove incumbent CEO Mark Ullman and replace him with Ron Johnson, a former executive at Apple who has been credited with the development of the company's Apple Store.

However, after around two years at the helm, Ron Johnson was ousted from his post and replaced by Mark Ullman (what I call the old switcheroo of embarrassment and shame on the Board's part) due to sales of the company falling from more than $17 billion to just shy of $13 billion per year and incurring significant yearly losses to boot.

In all fairness, it would be a disservice to say that the company's fall from grace had anything to do with its experimental model. Rather, J.C. Penney's (still) mounting losses can be chalked up to its decision to change its pricing structure from one involving regular sales to "everyday low prices". This strategic change disenfranchised customers who had shopped there because of major periodic sales. In fact, even after Ron Johnson was removed from the company, management has remained committed to his idea to develop the model that was pioneered by Rite Aid and GNC in 1998.

What's it all mean?
With all this being said, what is the significance of the partnership between Rite Aid and GNC in the respect of how it impacts each company? Unfortunately, it is impossible to peg an exact dollar amount on it all, but enough information does exist to understand how it influences corporate fundamentals.

To begin with, let's look at the numbers we do know. As of each company's most recent fiscal quarter, we can see that GNC has 2,186 stores-within-a-store located in Rite Aids across the country. Based on the terms of the most recent partnership agreement between the firms, another 82 GNC stores will be opened inside Rite Aid stores nationwide, bringing the total to 2,268 as a minimum by the end of 2014.

As things stand right now, with the 2,186 GNC stores located inside Rite Aid stores, this would mean that 47.3% of Rite Aids currently have a GNC located inside. This leaves plenty of opportunities for GNC to grow as Rite Aid grows. However, it is unlikely that GNC will ever be completely reliant on this agreement due to the fact that only around 26.7% of its stores are directly affiliated with Rite Aid. Even more interesting is that while 26.7% of its stores are located inside Rite Aids, the company's business with Rite Aid only comprises about 2.5% of consolidated sales (or $60.75 million in 2012).

Foolish takeaway
The future is almost always unclear when it comes to investment decisions, so we don't really know what it holds for Rite Aid or GNC. However, we can conclude that while a reasonable percent of GNC stores are located inside of Rite Aid stores (as various companies are beginning to locate themselves in J.C. Penney's stores), the failure or flourishing of Rite Aid wouldn't really impact the company's bottom line much.