Photo above: Origami Owl Co-founders Bella and Chrissy Weems
Click here to order the September 2014 issue in which this article appeared.
Culture of Celebration
Whether it was a 45th birthday party for the Mary Kay Pink Cadillac or a social media-fueled fundraiser for Thirty-One Gift’s philanthropic partner Ronald McDonald House Charities, celebration, personal growth and giving back were in full force at direct selling events the past few months, showcasing the powerful role this plays in business growth and development.
“For us, events is a culture function that has the sales tools to support,” Origami Owl Founder and Co-President Chrissy Weems told Direct Selling News during a break at the fast-growing company’s second national convention, “because we believe when you build the person holistically that the sales will come.”
Herbalife Analyst Details the ‘Death Blow’ That Wasn’t
This summer marked a significant development in the ongoing battle activist shareholder Bill Ackman is waging against one of the world’s largest direct selling companies: Los Angeles-based Herbalife Ltd.
Ackman gave a three-and-a-half-hour presentation in late July designed to convince investors, journalists and regulators of the validity of his short position on Herbalife stock. He said his team spent $50 million on its investigation of more than 240 nutrition clubs.
Scott Van Winkle, Managing Director of the capital markets firm Canaccord Genuity Inc. who follows Herbalife, spoke with Direct Selling News after the presentation. “The ultimate takeaway,” Van Winkle said, “is that Ackman thinks multilevel marketing is a pyramid scheme.”
Though Ackman was careful not to comment on the business practices of any other direct selling companies, he didn’t pull any punches when it came to criticizing people who have worked with Herbalife, including former Secretary of State Madeleine Albright and soccer star David Beckham.
“Taking those personal shots discredits the presentation,” Van Winkle said. “Unless you are just simply trying to scare away Herbalife’s service providers.”
In the days leading up to the presentation, the price of Herbalife shares dropped as Ackman made the media rounds promising a “death blow” to the company. Investors were unimpressed by the presentation itself, sending share prices back up 25 percent. A few days later, weaker-than-expected financial results pushed the share price down again. Until the Federal Trade Commission concludes its investigation, stock volatility seems likely to continue.
“The direct selling industry needs to stay focused on whether the FTC is looking at multilevel marketing as a channel and business model more so than Herbalife specifically,” Van Winkle said. “I think the reality is that if there is any outcome here for Herbalife short of the worst case scenario, all of the publicly trading direct selling companies will be valued higher down the road.”
The Direct Selling Association recently approved seven new members:
Boisset Wine Living At Home
Direct-to-consumer marketing arm of Boisset Family Estates winemakers
Country Gourmet Home
Direct seller of gourmet food mixes and wickless wax melts
Nail wraps for at-home application
Jewelry and scarves
MiA Bath & Body
Customized bath and body products
National Motor Club
Emergency roadside assistance and other services
I know that summer is supposed to be a time to relax and recharge, but this season has been packed! I’d love to hear what you and your organizations have planned for fall. As always, thanks for reading.
Lauren Lawley Head