ViSalus

Vi (formerly ViSalus Sciences)[2] is an American multilevel marketing (MLM) company based in Los Angeles, California, with offices in Downtown Detroit, Michigan.[3]· The company is mostly known for the Body by Vi 90-Day Challenge platform. The company markets weight management nutritional products, dietary supplements and energy drinks in the United States, Canada, Italy and United Kingdom.[4][5] Weight management products, including Vi-Shape meal replacement shake and Vi-Trim Clear Control Drink Mix, form the bulk of the company's sales.[6]

Vi
IndustryMulti-level marketing
FoundedMarch 1, 2005 (2005-03-01)
FoundersRyan Blair (CEO)
Blake Mallen (CMO)
Nick Sarnicola
Headquarters
Los Angeles, CA, Detroit
,
USA
Number of locations
2
Area served
USA, Canada, UK
ProductsDietary supplements
Number of employees
275[1]
Websitevi.com

History

Vi was originally started in 1997 by Nick Sarnicola and Blake Mallen, two distributors with The Free Network, LLC, a telecommunications MLM company based in Troy, Michigan.[3] After The Free Network folded in March 2005, Vi was purchased by wireless Internet developer Ryan Blair with investment from Ropart Asset Management, a private equity firm owned by Robert B. Goergen. Sarnicola and Mallen were retained as sales chief and CMO, respectively. The company was moved to the San Francisco Bay Area.[7]

The 2008 recession put Vi near bankruptcy, with the business $6 million in debt.[8] In 2008, Vi was acquired by Blyth, Inc., a multi-level marketing company that sells home decor which had been founded by Georgen.[7] In the first stage of the takeover – completed in 2008 – Blyth purchased a 43.6% equity interest for $14.0 million.[6][9] By 2010 the company had returned to profitability, and Vi was making over $15 million a month.[10] Blyth completed the second phase of the takeover in 2011, investing an additional $2.5 million and increasing their ownership share to 57.5%.[11]

In August 2012, Blyth – which then owned a 73% share of Vi – planned to spin off the company in an initial public offering of shares worth up to $175 million. In September 2012, Moody's Investors Service downgraded Blyth's credit from "stable" to "negative,"[12] Vi reported extremely high growth rates in 2012, being audited at 450%, which made it one of the fastest growing companies of its size. Blyth stated that the company's growth was not properly valued.[7] Blyth withdrew the Vi IPO citing uncertain market conditions.[13] According to the Detroit Free Press, one reason why the Vi IPO was cancelled was because the co-founders were artificially inflating sales numbers: "Vi has been criticized for allegedly puffing up its record sales in 2012 by recruiting top product distributors in the industry. Like mercenaries, these distributors were purportedly willing to switch company affiliation for a price, and after Vi peaked, they jumped to another direct sales company. Such a practice would be legal."[14]

In September 2014, Vi announced that it had become a private, independent company. Vi arranged a transaction with Blyth to convert the company's stock to common stock, although Blyth remains an equity holder with 10% of Vi's stock.[15][5][16] The transaction eliminated Blyth's obligation to pay the co-founders $143.2 million as part of the 2008 acquisition. At the time of the transaction, Vi' earnings and revenue had declined from a high-point in 2012, and the company had been operating at a loss for 2013 and the first two quarters of 2014.[5] After becoming private, Vi stopped reporting sales figures.[17]

According to the Detroit Free Press, Vi was at a high of 114,000 distributors in the summer of 2012.[14] According to a report in Crain's Detroit Business, Vi had 76,000 distributors in June 2013, which declined to 31,800 distributors in September 2014. The article also reported that Sarnicola is the largest distributor in Vi, with his distributor team accounting for 74% of company revenue.[5] In 2016 the company laid-off 87 workers at its Troy facility, following years of declining sales and legal problems.[17]

Controversies

Racketeering

In October 2013, charges were filed in US Federal Court that Nick Sarnicola and Blake Mallen on behalf of Vi committed Racketeer Influenced and Corrupt Organizations Act (RICO) violations, engaged 3rd party individuals to commit criminal acts, extortion and other violations against Fred Ninow & Ken Dunn of Ocean Avenue.[18]

In the lawsuit, Ocean Avenue, a competing direct selling nutrition company, accused Vi officials of hiring two private investigators in California, Nathan Moser and Peter Siragusa, who in turn contracted with computer experts to illegally hack into the files of Ocean Avenue, and former Vi distributors who switched to Ocean Avenue in late 2012.[14][19][20] Vi denied the allegations.[21][14] In July 2015 the two private investigators pleaded guilty to the charges, which are Federal offenses with sentences of one to three years. Vi' security director Carlo Pacileo was convicted and sentenced to three years' probation.[21]

Pyramid scheme

In 2012, CNBC Commentator Herb Greenberg said Vi walks "a controversial line between legal direct selling and pyramid scheme."[22]

Vi was investigated by the Southern Investigative Reporting Foundation which published a detailed report that assailed the company's business model and high probability that investors will lose their money in the scheme.[7][23]

In April 2016, a class action suit was filed against Vi, Robert Goergen, Sr., Todd Goergen, Nick Sarnicola, Blake Mallen and Ryan Blair in the United States District Court for the Eastern District of Michigan alleging racketeering and fraudulent pyramid scheme selling of distribution rights.[24]

Products

Weight-management products, including Vi-Shape meal replacement shake, Vi Go Instant Energy and Vi-Trim Clear Control Drink Mix, form the bulk of the company's sales.[6] Other products include Neuro, an energy drink, and Vi-Pak, an energy supplement, which were both developed by Michael Siedman, an ear, nose, and throat specialist.[3] Vi promotes its products with the Body by Vi Challenge, a program where people set weight-loss and physical fitness goals to be achieved over a 90-day period.[25][26][27]

Locations

Vi's products are now available in 16 countries including USA, UK, Italy and Canada.[28] In 2013, Vi launched in the United Kingdom.[29] On February 18, 2014, Vi announced its expansion to Germany and Austria.[30]

gollark: Füthārκ!
gollark: Futhark is cōōl.
gollark: Ah. No. PotatOS just lets me remotely send commands.
gollark: If they also had modems.
gollark: If you installed potatOS on them I would be able to remotely track them.

References
  1. ViSalus. "ViSalus Careers. About Us". Retrieved 6 May 2012.
  2. "Vi sets world records while launching new products and expanding global mission". Your Site NAME Goes HERE. Retrieved 2019-06-07.
  3. "Pill Power". Metroactive. Retrieved 3 May 2012.
  4. "Blyth, Inc., Form 10-K, Annual Report, Filing Date Mar 14, 2013". secdatabase.com. Retrieved April 26, 2013.
  5. Walsh, Dustin (14 September 2014). "ViSalus co-founders buy back stake, launch new product line". Crain's Detroit Business. Retrieved 23 September 2014.
  6. Edgar Online via Yahoo Finance. "Blyth Inc. 10K - 4/18/2011". Retrieved 15 May 2012.
  7. Boyd, Roddy (26 November 2012). "The Infernal Machine: From Powder to Dust". Southern Investigative Reporting Foundation. Retrieved 31 May 2014.
  8. Giang, Vivian (14 August 2012), How This Guy Went From Gang Member To Multimillionaire Entrepreneur, Business Insider, retrieved 10 February 2013
  9. DM News. "Blyth Makes Two Acquisitions". Retrieved 3 May 2012.
  10. Schawbel, Dan (8 August 2011). "Entrepreneurship: Nothing to Lose and Everything to Gain". Forbes. Retrieved 3 May 2012.
  11. "Blyth, Inc. Completes Third Closing of ViSalus Acquisition". Reuters. Retrieved 6 May 2012.
  12. "Moody's lowers outlook on Blyth". Bloomberg Businessweek. September 20, 2012. Retrieved 2012-09-22.
  13. Blyth's ViSalus unit pulls plans for IPO, Marketwatch, 26 September 2012, retrieved 10 February 2013
  14. Reindl, JC (1 August 2014). "Troy-based direct seller ViSalus in sales spiral". Detroit Free Press. Retrieved 11 January 2015.
  15. "ViSalus Completes Founder-Led Management Buyout (Press Release)". MarketWatch. PR Newswire. 5 September 2014. Retrieved 23 September 2014.
  16. "Blyth Inc. (BTH) Is Up Sharply After Majority Sale Of ViSalus". RTT News. 3 September 2014. Retrieved 23 September 2014.
  17. Reindl, JC (15 January 2016). "Layoffs, lawsuits at once-hot direct-sales firm ViSalus". Detroit Free Press. USA Today. Retrieved 12 March 2018.
  18. Tina Williams (October 30, 2013). "Ocean Avenue Hits ViSalus With Espionage Lawsuit". businessforhome.org. Archived from the original on January 22, 2014. Retrieved May 28, 2014.
  19. Melendez, Steven (29 May 2015). "Hackers on Demand". Fast Company.
  20. Lee, Henry K. (11 February 2015). "Private eyes allegedly hired hackers to gain edge in civil suits". San Francisco Gate. Retrieved 18 August 2015.
  21. Reindl, JC (January 15, 2016). "Layoffs, lawsuits at once-hot direct-sales firm ViSalus". Detroit Free Press. Retrieved December 12, 2016.
  22. Greenberg, Herb (24 August 2012), Beware of Get-Rich-Quick IPO, CNBC, retrieved 1 March 2013
  23. National Council Against Health Fraud, Consumer Health Digest #13-10, March 7, 2013
  24. "Sommers Schwartz, P.C. Seeks Class Action Status on Behalf of Plaintiffs Suing ViSalus, Inc. for Alleged RICO Violations". Business Wire, Inc. Retrieved 14 December 2016.
  25. Kitt Walsh. "Be a kick butt entrepreneur". CNN Money. Retrieved September 25, 2012.
  26. "Supplement Maker's Sales Appear Up to 'Challenges'". Los Angeles Business Journal: 10–12. 30 April 2012.
  27. "The Changing Face of Commerce". Nutrition Business Journal. Direct Sales Channels: Internet, MLM, Media. XVII (4): 3–4. 1 April 2012. Archived from the original on 28 May 2012. Retrieved 8 May 2012.
  28. Naperville, Community Contributor. "Disrupting the Weight Loss Industry to Raise a Healthier Generation – The Story of Vi". Naperville Sun. Retrieved 2019-06-07.
  29. "Visalus Launches in the United Kingdom (press release)". 24 April 2013. Retrieved 30 May 2014.
  30. "ViSalus, Inc. Expands to Germany and Austria". prnewswire.com. February 18, 2014.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.