ViSalus

Last updated • 5 min readFrom Wikipedia, The Free Encyclopedia
Vi
Industry Multi-level marketing
FoundedMarch 1, 2005 (2005-03-01)
Founders Ryan Blair (CEO)
Blake Mallen (CMO)
Nick Sarnicola
Headquarters
Los Angeles, CA, Detroit
,
USA
Number of locations
2
Area served
USA, Canada, UK
Products Dietary supplements
Number of employees
275 [1]
Website vi.com

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]

Contents

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.[ citation needed ] Blyth completed the second phase of the takeover in 2011, investing an additional $2.5 million and increasing their ownership share to 57.5%. [10]

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," [11] 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. [12] 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." [13]

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. [14] [5] [15] 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. [16]

According to the Detroit Free Press, Vi was at a high of 114,000 distributors in the summer of 2012. [13] 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. [16]

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. [17]

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. [13] [18] [19] Vi denied the allegations. [20] [13] 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. [20]

Pyramid scheme

In 2012, CNBC Commentator Herb Greenberg said Vi walks "a controversial line between legal direct selling and pyramid scheme." [21]

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] [22]

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. [23]

Robocalls

In April 2019, a jury awarded a plaintiff in a class-action lawsuit $925 million against ViSalus for making millions of robocalls (the money will be distributed amongst the eligible victims), which was upheld by a federal judge in 2020. [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]

Related Research Articles

<span class="mw-page-title-main">Amway</span> American multi-level marketing company (1959– )

Amway Corp. is an American multi-level marketing (MLM) company that sells health, beauty, and home care products. The company was founded in 1959 by Jay Van Andel and Richard DeVos and is based in Ada, Michigan. Amway and its sister companies under Alticor reported sales of $8.9 billion in 2019. It is the largest multi-level marketing company in the world by revenue. It conducts business through a number of affiliated companies in more than a hundred countries and territories.

<span class="mw-page-title-main">Amway North America</span> American multi-level marketing company

Amway North America is an American worldwide multi-level marketing (MLM) company, founded 1959 in Ada, Michigan, United States. It is privately owned by the families of Richard DeVos and Jay Van Andel through Alticor which is the holding company for businesses including Amway, Amway Global, Fulton Innovation, Amway Hotel Corporation, Hatteras Yachts, and manufacturing and logistics company Access Business Group. After the launch of Amway Global, it replaced the Amway business in the United States, Canada and the Caribbean, with the Amway business continuing to operate in other countries around the world. On May 1, 2009, Quixtar made the name change to Amway Global and fused the various different entities of the parent company.

Xango, LLC, was a privately owned Lehi, Utah-based multi-level marketing company founded in 2002. It was acquired by Zija International in May 2017.

Herbalife Nutrition Ltd., also called Herbalife International, Inc. or simply Herbalife, is an American multinational multi-level marketing (MLM) corporation that develops and sells dietary supplements. The company has been alleged to have fraudulently operated a pyramid scheme. Some products sold by Herbalife have caused acute hepatitis. The business is incorporated in the Cayman Islands, a tax haven, with its corporate headquarters located in Los Angeles, California.

Forever Living Products is a multi-level marketing company which was founded in 1978 in Tempe, Arizona by Rex Maughan. The company has reported a network of 9.3 million distributors and revenue of $4 billion in 2021, and in 2006 they reported having 4,100 employees.

<span class="mw-page-title-main">Primerica</span> American multi-level marketing insurance company

Primerica, Inc. is a multi-level marketing company that provides insurance, investment and financial services to middle-income families in the United States and Canada.

<span class="mw-page-title-main">Nu Skin Enterprises</span> American multi-level marketing company

Nu Skin Enterprises, Inc. is an American multilevel marketing company that develops and sells personal care products and dietary and nutritional supplements. Under the Nu Skin and Pharmanex brands, the company sells its products in 54 markets through a network of approximately 1.2 million independent distributors.

Blyth, Inc. is a Greenwich, Connecticut based marketing and manufacturing company that sells personal and decorative products. In 2001, it was the largest candlemaker in the United States. Subsidiaries include the multi-level marketing companies PartyLite and Visalus.

Rocket Mortgage, LLC, formerly Quicken Loans, LLC, is an American mortgage lender, headquartered in Detroit, Michigan. In January 2018, Rocket Mortgage became the largest overall retail lender in the U.S., and it was also the largest online retail mortgage lender. Rocket Mortgage relies on wholesale funding to make its loans and uses online applications rather than a branch system. Amrock is also part of the Rocket Mortgage Family of Companies. The company closed more than $400 billion of mortgage volume across all 50 states from 2013 through 2017.

<span class="mw-page-title-main">Mannatech</span> Multinational multi-level marketing company

Mannatech Inc. is a publicly traded, multinational multi-level marketing firm that sells dietary supplements and personal care products. It was founded in November 1993 by Samuel Caster, and is headquartered in Flower Mound, Texas. The company's stock is traded on the NASDAQ exchange under the symbol MTEX. As of 2017, Mannatech employed 252 people and sold its products through some 220,000 independent sales associates.

Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial and sometimes illegal marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling the company's products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.

SMART Technologies is a Canadian company headquartered in Calgary, Alberta, Canada and wholly owned by Foxconn. Founded in 1987, SMART is best known as the developer of interactive whiteboards branded as the "SMART Board" popularly used in education and business.

<span class="mw-page-title-main">MonaVie</span> Multi-level marketing company

MonaVie is a defunct, American multi-level marketing company that manufactured and distributed products made from blended fruit juice concentrates, powders, and purées. The company was the subject of several controversies. Health claims for its products had not been scientifically confirmed or approved by regulatory authorities, and its chairman had been previously involved in false health claims concerning another beverage company. According to Forbes, MonaVie's business plan resembled a pyramid scheme. In 2015, the company defaulted on a US$182 million loan and went into foreclosure. Florida-based Jeunesse Global took over MonaVie’s assets when it purchased the note for $15 million.

<span class="mw-page-title-main">Groupon</span> American worldwide e-commerce marketplace

Groupon, Inc. is an American global e-commerce marketplace connecting subscribers with local merchants by offering activities, travel, goods and services in 13 countries. Based in Chicago, Groupon was launched there in November 2008, launching soon after in Boston, New York City and Toronto. By October 2010, Groupon was available in 150 cities in North America and 100 cities in Europe, Asia and South America, and had 35 million registered users. By the end of March 2015, Groupon served more than 500 cities worldwide, nearly 48.1 million active customers and featured more than 425,000 active deals globally in 48 countries.

<span class="mw-page-title-main">AdvoCare</span> American dietary supplement company

AdvoCare International, LLC is an American dietary supplement company. They are a direct sales company and a former multi-level marketing company that was charged with operating a pyramid scheme. The company, headquartered in Richardson, TX, was founded in 1993 by Charles Ragus.

Market America is a multi-level marketing company founded in 1992 by JR and Loren Ridinger. Headquartered in Greensboro, North Carolina, the company employed around 800 people as of 2016. The products offered by the company include household cleaning supplies, jewelry, personal care products, auto care, cosmetics, dietary supplements, custom websites, water purifiers, and weight management products. A 2017 lawsuit accused the company of being an illegal pyramid scheme.

Ryan Blair is an American entrepreneur and author. He is the former co-founder and chief executive officer of the multi-level marketing company ViSalus Sciences, a subsidiary of the publicly traded company Blyth, Inc.

VemmaNutrition Company was a privately held multi-level marketing company that sold dietary supplements. The company was shut down in 2015 by the FTC for engaging in deceptive practices and being a pyramid scheme.

Young Living is a multi-level marketing company based in Lehi, Utah. Founded by Donald Gary Young in 1993, it sells essential oils and other related products.

LuLaRoe is a United States-based multi-level marketing company that sells women's clothing. It was founded in 2012 by DeAnne Brady and her husband Mark Stidham and is currently based in Corona, California.

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. 7 May 2019. Retrieved 2019-06-07.
  3. 1 2 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. 1 2 3 4 Walsh, Dustin (14 September 2014). "ViSalus co-founders buy back stake, launch new product line". Crain's Detroit Business. Retrieved 23 September 2014.
  6. 1 2 3 Edgar Online via Yahoo Finance. "Blyth Inc. 10K - 4/18/2011" . Retrieved 15 May 2012.
  7. 1 2 3 4 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. ↑ "Blyth, Inc. Completes Third Closing of ViSalus Acquisition". Reuters. Archived from the original on January 19, 2012. Retrieved 6 May 2012.
  11. ↑ "Moody's lowers outlook on Blyth". Bloomberg Businessweek . September 20, 2012. Archived from the original on September 23, 2012. Retrieved 2012-09-22.
  12. ↑ Blyth's ViSalus unit pulls plans for IPO, Marketwatch, 26 September 2012, retrieved 10 February 2013
  13. 1 2 3 4 Reindl, JC (1 August 2014). "Troy-based direct seller ViSalus in sales spiral". Detroit Free Press. Retrieved 11 January 2015.
  14. ↑ "ViSalus Completes Founder-Led Management Buyout (Press Release)". MarketWatch. PR Newswire. 5 September 2014. Retrieved 23 September 2014.
  15. ↑ "Blyth Inc. (BTH) Is Up Sharply After Majority Sale Of ViSalus". RTT News. 3 September 2014. Retrieved 23 September 2014.
  16. 1 2 Reindl, JC (15 January 2016). "Layoffs, lawsuits at once-hot direct-sales firm ViSalus". Detroit Free Press. USA Today. Retrieved 12 March 2018.
  17. ↑ 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.
  18. ↑ Melendez, Steven (29 May 2015). "Hackers on Demand". Fast Company.
  19. ↑ Lee, Henry K. (11 February 2015). "Private eyes allegedly hired hackers to gain edge in civil suits". San Francisco Gate. Retrieved 18 August 2015.
  20. 1 2 Reindl, JC (January 15, 2016). "Layoffs, lawsuits at once-hot direct-sales firm ViSalus". Detroit Free Press . Retrieved December 12, 2016.
  21. ↑ Greenberg, Herb (24 August 2012), Beware of Get-Rich-Quick IPO, CNBC, retrieved 1 March 2013
  22. ↑ National Council Against Health Fraud, Consumer Health Digest #13-10, March 7, 2013
  23. ↑ "Sommers Schwartz, P.C. Seeks Class Action Status on Behalf of Plaintiffs Suing ViSalus, Inc. for Alleged RICO Violations". Business Wire, Inc. 12 April 2016. Retrieved 14 December 2016.
  24. ↑ Bernstein, Maxine (18 August 2020). "Record $925 Million Verdict Upheld in ViSalus Unlawful Recorded Robocall Case". The Oregonian. Retrieved 20 August 2020.
  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. XVII (4). Direct Sales Channels: Internet, MLM, Media: 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.{{cite web}}: |first= has generic name (help)
  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 page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.