Settlement Does Not Change Herbalife’s Business Model as a Direct Selling Company.
Herbalife Board of Directors Frees Carl Icahn to Acquire Up to 34.99% of the Company’s Outstanding Common Shares.
Global nutrition company Herbalife Ltd . (NYSE: HLF) (“Herbalife” or “the Company”) announced it has reached a settlement agreement with the Federal Trade Commission (“FTC” or the “Commission”) resolving the FTC’s multi-year investigation of the Company. The terms of the settlement do not change Herbalife’s business model as a direct selling company and set new standards for the industry. With the settlement agreement announced today, the FTC’s investigation of Herbalife is complete.
Herbalife and the Illinois Attorney General also reached a settlement, and the Company agreed to pay $3 million as part of this separate agreement. With the conclusion of the Illinois investigation, the Company is not aware of any active investigations by any other state attorney general.
“The settlements are an acknowledgment that our business model is sound and underscore our confidence in our ability to move forward successfully, otherwise we would not have agreed to the terms,” stated Michael O. Johnson, chairman and CEO, Herbalife.
While the Company believes that many of the allegations made by the FTC are factually incorrect, the Company believes settlement is in its best interest because the financial cost and distraction of protracted litigation would have been significant, and after more than two years of cooperating with the FTC’s investigation, the Company simply wanted to move forward. Moreover, the Company’s management can now focus all of its energies on continuing to build the business and exploring strategic business opportunities.
The Company’s Board of Directors (“Board”) unanimously approved the settlements and voluntarily established an Oversight Committee of the Board (“Committee”) that will ensure full compliance with the terms of the agreement. The Board also appointed Henry Wang, presently Deputy General Counsel and Chief Compliance Officer, to lead the Company’s implementation efforts, reporting directly to the Committee on these matters. Additionally, Pamela Jones Harbour, currently Senior Vice President of Global Member Practices and Compliance and former FTC Commissioner, was appointed to oversee implementation of new distributor compliance initiatives.
The Oversight Committee complements the Board’s ongoing commitment to lead the industry while continuously improving customer protections and satisfaction. During the past few years, the Board has engaged experts in the field of consumer protection to advise them on regulatory compliance and best practices leading to many of the enhanced safeguards that were previously implemented and are being expanded in today’s agreement.
The terms of the settlement apply only to the Company’s sales in the U.S., which comprise approximately 20% of total net sales. As part of the settlement, the Company agreed to new procedures and enhancements to some policies that already exist. Many of the terms agreed to were either already being contemplated by the Company or are extensions of practices already in place and will be implemented over the next 10 months. The two primary components of the agreement are:
Other terms agreed to include enhancing training provided to distributors; requiring a business plan and a one-year waiting period before opening a nutrition club; extending the amount of time a distributor may return an initial membership pack; paying for all shipping costs associated with any returned products; prohibiting auto-shipment of products; auditing by an independent third party; and extending the protections on income claims including greater specificity around lifestyle claims.
Importantly, as was the case with the FTC’s Amway decision in 1979 (In the Matter of Amway Corporation Inc., et. al.), the Company anticipates these agreed upon procedures will now provide direction for the entire direct selling and multi-level marketing industry. Therefore, the Company believes that while some of the additional terms do not have significant impact on the Company, these provisions will improve policies throughout the industry. For example, the Company implemented stricter consumer protection rules relating to auto-ship several years ago and the practice now represents less than 1% of all Company sales. Similarly, only 0.02% of all Herbalife products in the United States are returned to the Company, so paying shipping costs associated with returned orders is expected to have minimal impact. While the costs associated with these respective changes are expected to be immaterial to Herbalife, they will likely lead to significant changes across the industry.
Furthermore, as previously referenced in the Company’s public disclosure on May 5, 2016, Herbalife also agreed to make a $200 million payment to the FTC as part of the settlement.
The Company additionally announced that it has granted Carl C. Icahn, Icahn Enterprises Holdings L.P. and certain related entities (collectively the “Icahn Parties”) the right to increase the size of their maximum ownership position in Herbalife to up to 34.99% of the Company’s outstanding common shares from a previous maximum of 25%. The Icahn Parties currently own 17 million common shares of Herbalife, representing approximately 18.3% of the Company’s outstanding common shares. Herbalife’s 13-member Board of Directors will continue to include five members designated by the Icahn Parties.
“I have always believed in Herbalife’s strong fundamentals and am pleased the Board has decided to increase my ownership limit from 25% to 34.99% of the Company’s outstanding shares. A significant part of my investment success is directly tied to our in-depth investment research and understanding of often complex and unique issues facing companies,” said Carl Icahn. “I have the greatest confidence in Herbalife’s CEO, Michael Johnson, and the entire management team, who have skillfully led the Company through adversity, including holding firm against a high-profile PR campaign against the Company by Bill Ackman where it was alleged more than once that the Company would be shut down. Obviously, we are still here.”
The American economy is full of people searching for supplemental income and those who choose to sell Herbalife products are no different. Companies like Uber, Airbnb and Etsy all offer industrious people the opportunity to generate supplemental income with low barriers to entry and the flexibility to work on their own terms. In the United States alone, there are more than 18 million direct sellers and more than 156 million consumers who purchase products from these individuals. The very essence of the entire $35 billion American direct selling industry is to provide individuals with the opportunity to be their own boss, to set their own schedule and to make their own decisions. The Company believes this settlement will strengthen and improve this important industry.
Consumer satisfaction with Herbalife’s nutrition products and services is of paramount importance and like all good companies, Herbalife has evolved some of its policies and practices over the past decade to ensure that its customers and more than 4 million preferred members and independent distributors have the best experience possible. Herbalife remains committed to working with all of its customers and independent distributors to ensure an exceptional experience and to continuing its commitment to consumer protections.
As the Company concludes this matter and looks to a promising future, it hopes that those who have shorted the Company’s stock will finally understand their thesis is misinformed and flawed, and the Company will withstand any market-manipulation campaign, even an unprecedented one that has lasted more than three years and cost a billionaire short seller hundreds of millions of dollars in addition to significant reputational damage and a loss of credibility with investors.
For more information, visit www.Herbalife.com/StrongerThanEver.
Herbalife is a global nutrition company that has been changing people’s lives with great products since 1980. Our nutrition, weight-management, energy and fitness and personal care products are available exclusively to and through dedicated independent Herbalife distributors in more than 90 countries. We are committed to fighting the worldwide problems of poor nutrition and obesity by offering high-quality products, one-on-one coaching with an Herbalife distributor and a community that inspires customers to live a healthy, active life.
The company has over 8,000 employees worldwide, and its shares are traded on the New York Stock Exchange (NYSE: HLF) with net sales of $4.5 billion in 2015. To learn more, visit Herbalife.com or IAmHerbalife.com .
“Youngevity discovered that Wakaya violates California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”), which is codified at California Health & Safety Code § 25248.5 et seq., with respect to the products identified below.
These violations have occurred and continue to occur because Wakaya failed to provide clear and reasonable warnings concerning, inter alia, the excessive lead content in certain products.
This letter serves as a notice of these violations to Wakaya and the appropriate enforcement agencies. Pursuant to Section 25249.7(d) of the statute, Youngevity will seek leave to amend its Complaint in YGYI v. Wakaya after the sixty-day statutory period following effective service of this notice, unless the parties can reach a remedial solution that prevents harmful consumer exposures.
Youngevity intends to add causes of action against Wakayafor Proposition 65 violations and related Lanham Act counts.
This notice provides the essential notice of violations of California’s Proposition 65.
Those violations are significant and pose an immediate threat to public safety. The lead and arsenic exposure levels caused by ingestion or use of Wakaya’s products hereinbelow identified, including Wakaya’s bentonite clay product, are significantly higher thanpermissible under state thresholds.
Moreover, Wakaya promotes these products as non-toxic alternatives to competing products. Those advertising claims are apparently false or misleading, and encourage consumers to use the Wakaya products despite the known health risks associated with same. For example, Wakays sells a “Detox Cap” for use in its Bula Bottles that promises to cleanse the body of built-up wastes and toxins. Yet that Detox Cap itself contains elevated levels of lead and arsenic that exceed Prop 65 warning levels.
Alleged Violator. The name of the company covered by this notice that violated Proposition 65 is: Wakaya Perfection, LLC .
Consumer Products and Listed Chemicals. The products that are the subject of this notice and the chemical in those products identified as exceeding allowable levels are:
On February 27, 1987, the State of California officially listed lead as a chemical known to cause developmental toxicity, and male and female reproductive toxicity. On October 1, 1992, the State of California officially listed lead and lead compounds as chemicals known to cause cancer. Similarly, on February 27, 1987, the State of California officially listed arsenic as a chemical known to cause cancer.
Youngevity may continue to investigate other products that may reveal further violations and result in subsequent notices of violations.
Route of Exposure. The consumer exposures that are the subject of this notice result from the purchase, acquisition, handling, and recommended use of those products. Consequently, the primary route of exposure to those chemicals has been and continues to bethrough ingestion and/or dermal contact, but may have also occurred and may continue to occur through inhalation.
Approximate Time Period of Violations. Ongoing violations have occurred every day since at least approximately December 20, 2015, when the Alleged Violator became the exclusive distributor for those products, as well as every day since the products were introduced
into the California marketplace, and will continue every day until clear and reasonable warnings are provided to product purchasers and users or until these known toxic chemicals are either removed from or reduced to allowable levels in the products.
Proposition 65 requires that a clear and reasonable warning be provided prior to exposure to the identified chemicals. The method of warning should be a warning that appears on the product label. The Alleged Violator violated Proposition 65 because it failed to provide persons handling and/or using these products with appropriate warning that they are being exposed to those chemicals.
Youngevity is a company that promotes consumer well-being and longevity through sound dietary habits. Youngevity exercises great care to ensure that its products are lawful and safe for consumption. Consistent with the public interest goals of Proposition 65 and apreference to have these ongoing violations of California law remedied expeditiously,
Youngevity seeks a constructive resolution that includes an enforceable agreement executed by Wakaya to: (1) reformulate the identified products so as to eliminate further exposures to the identified chemicals, or provide appropriate warnings on the labels of these products; and (2) pay an appropriate civil penalty.
Such a resolution would prevent further undisclosed consumer exposures, as well as additional and expensive time consuming litigation. Absent such prompt remedial measures, Youngevity intends to pursue a claim under Prop 65 in the active litigation (YGYI v. Wakaya) and consistent with the public interest.”
4Life is classified as Triple A (AAA+) opportunity based on key figures such as revenue , momentum , Alexa ratings, poll results , input from direct selling professionals, top earners and Head Office visits .
Business For Home recommends 4Life. There is high certainty that the net benefit is substantial for a (new) representative.
In 1998, 4Life Founders David and Bianca Lisonbee launched the company’s flagship immune system support product, 4Life Transfer Factor.
As the first network marketing company to do so, 4Life’s leading group of doctors, scientists, and researchers continue to advance immune system science with innovations in product formulation, production standards, delivery methods, and more.
4Life runs its own manufacturing facility and oversees each step of the manufacturing process. This includes, but is not limited to, batching, blending, encapsulating, and packaging.
Many of 4Life products undergo hundreds of analytical tests before being released for distribution. Extensive testing ensures that each specification is evaluated and reported to maintain quality throughout a product’s lifecycle.
To certify each 4Life Transfer Factor product, 4Life spent over one million dollars on state-of-the-art laboratory equipment to create one of the most advanced analytical labs in the direct selling industry.
The company’s research and pursuit of patent protection demonstrate the company’s long-term commitment to exclusivity and stability. 4Life holds four U.S. patents and 32 international patents—with dozens more pending.
Today, people in more than 50 countries enjoy the immune system support of 4Life products.
The company has achieved in 2015 $321 Million in annual sales.
We don’t have to choose between the lesser of two evils: skin cancer versus internal cancers from vitamin D deficiency.
Video Source: NutritionFacts.org
Twenty years ago, the world’s top beauty brand and direct seller Mary Kay brought rewarding opportunities to China. Since then, its business stretches throughout China, with branches in 35 major cities and the only overseas production center in Hangzhou, Mary Kay Asia-Pacific Production Center.
In recent years, Mary Kay has continued investment and built a central distribution center, the Asia-Pacific Research and Development Center, and cosmetic and nutrition plants to enrich production lines so that women working for Mary Kay can have more opportunities. By now, China has become the biggest market for Mary Kay.
“Enriching women’s lives” has always been Mary Kay’s corporate mission. In order to realize the Mary Kay founder’s dream, “to help women succeed through their own efforts,” Mary Kay not only keeps enhancing the value of the business platform, but is, in a way of “teaching a man to fish,” committed to help women realize their dreams.
In 2001, the first year for Mary Kay in China to make profits, the “Mary Kay Women’s Small Business Fund” was co-founded with China Women’s Development Foundation. Through interest-free revolving loans, the fund aims to help women succeed in business and achieve economic empowerment. So far, the fund has helped more than 70,000 women in 23 provinces of China. In 2012, further cooperating with United Nations Development Program as a new partner of the fund, a pilot project was executed in the Chuxiong Yi Autonomous Prefecture, Yunnan Province, providing loans and relevant skills training for local women. The project transformed the extinguishing traditional Yi embroidery handicrafts, turning them into a valuable skill and helping women achieve economic independence. Now these embroiders’ income and social status have tremendously improved. More than 550 women working outside went back to the local community, at their children’s side again.
Two months after Nepal’s earthquake, coincidently the time when the fund staff revisited the project site, those female embroiders expressed a touching wish: “The Nepal earthquake disaster is a tragedy, and we hope to be able to do something for the people behind the mountain.” Mary Kay decided to fulfill their wishes. Eventually, a trans-boundary fashion show across China and Nepal glittered on Shanghai fashion week.
On April 15, the first anniversary of Nepal earthquake, Mary Kay teamed up with independent brands Just For Tee and Timi Cheng to release the Sino-Nepal crossover feminine culture collection under the theme of “Lost Reappear” at the 2016 Shanghai Fashion Week. Yi embroidery elements both on clothes and accessories were from the embroiders benefiting from the fund; while the cashmere fabric is from Nepal women. Each cashmere product requires 11 steps of processing, all hand-made by local women, using inherited crafts. Despite the complex process, they refused to use mechanical production for better cashmere texture and more employment opportunities. Through this trans-boundary cooperation between Yi embroidery and Nepal cashmere, Mary Kay hopes to send blessings to the people still struggling to survive in Nepal and bring attention to the lost traditional culture.
Article Source: http://www.shanghaidaily.com/
Cosmetics and direct selling giant Mary Kay Inc. has updated its construction timeline for the massive new research and production facility it has planned for North Texas.