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September 01, 2015

News in Brief

News in Brief, September 2015


Click here to order the September 2015 issue in which this article appeared or click here to download it to your mobile device.


Mary Kay Keeps Focus on Philanthropy at Annual Seminar

Mary KayMore than 27,000 Independent Beauty Consultants gathered in Dallas this summer for the 2015 Mary Kay Seminar.

Mary Kay calls its anti-domestic violence initiative Don’t Look Away, and the company took its own advice by keeping the cause front and center during its 2015 Mary Kay Seminar. The annual event, held in five waves from July 15–Aug. 1, was all about empowering women—including survivors of domestic violence.

As 27,000 Independent Beauty Consultants gathered in Dallas, they had the opportunity to prepare care kits for survivors, donate professional clothing to local women’s shelters, and see Mary Kay’s new, award-winning series of public service announcement videos, One in Four. Mary Kay also recently announced $1.25 million in continued funding for loveisrespect, a text-for-help service launched as a tool for young people to help prevent dating abuse.

Seminar attendees, including more than 2,000 husbands who accompanied their wives, took part in assembling care kits filled with basic Mary Kay skincare products. Consultants distributed the 2,000 kits to 20 women’s shelters across the country. One of those shelters was The Family Place in Dallas, where a Mary Kay pink Cadillac made a local delivery during the Seminar.

The Dallas Convention and Visitors Bureau estimates that the Mary Kay Seminar pumped $30.4 million into the local economy. The event has taken place at the Kay Bailey Hutchison Convention Center Dallas since 1974 and is one of the city’s top 10 in terms of economic impact.


Stream Awards First Batch of Teslas to Top Associates

TeslaTesla Model S

Stream is taking its car bonus program to the next level with the creation of a new National Director position for top-performing Associates. The home services provider recently presented an electric-powered Tesla Model S to each of its qualifying National Directors. Dallas-based Stream is the first direct selling company to tap Silicon Valley automaker Tesla Motors—a fitting choice for a brand built on an innovative approach to marketing energy.

The seven-seat Model S sedan is the only model currently marketed by Tesla, but a Model X crossover will be available this fall. Following its introduction in June 2012, the Model S earned a slew of awards, such as Time’s Best Inventions of the Year 2012 and the top score ever from Consumer Reports magazine.


Tupperware Tops Quarterly Estimates with $62M Profit

Tupperware Brands Corp. (TUP—NYSE) recently announced that second-quarter profit exceeded expectations, despite revenue figures that dipped below Wall Street estimates.

Net income for the quarter was $62 million, up 30 percent from a year ago. On a per-share basis, the Orlando, Florida-based company reported a profit of $1.23, versus 93 cents in the prior year. On average, analysts had forecasted earnings of $1.17 per share. Adjusted earnings were $1.21, down 18 percent in dollars but up 13 percent in local currency.

Quarterly revenue totaled $588.9 million, coming in just under the $589.8 million estimated by analysts. Emerging markets accounted for 67 percent of sales, with strong performances from Brazil, China, the Middle East and North Africa.

The kitchenware and cosmetics seller said its salesforce increased 3 percent versus a year ago to 3 million. In the U.S. and Canada, Tupperware recorded a 14 percent increase in new consultants.

For the current quarter, the company forecasts earnings of 69 cents to 74 cents per share. Full-year earnings expectations are in the range of $4.42 to $4.52 per share.


Usborne Books Sustains 2-Year Turnaround

Educational Development Corp. (EDUC—NASDAQ), parent of bookseller Usborne Books & More, is marking 24 consecutive months of growth following a nine-year decline, according to the company’s quarterly earnings report.

Oklahoma-based Educational Development Corp. (EDC) operates EDC Publishing as well as the larger Usborne direct selling division. For the first quarter of fiscal year 2016, the combined businesses recorded net revenue of $9.6 million, up 34 percent from a year ago. Net income for the quarter ended May 31 rose 35 percent to $324,600.

At Usborne Books & More, a 108 percent increase in new sales associates spurred 59 percent revenue growth in the first quarter. The marketer of educational children’s books, twice recognized by Forbes magazine as one of “The 200 Best Small Companies in America,” is in the midst of a turnaround that began in 2012. In a recent interview with DSN, CEO Randall White attributed Usborne’s growth to a number of factors, including the decision to cancel an account with one of the brand’s primary wholesalers, thereby boxing out competition from Amazon.


Avon North America Sees Rare Profit in Second Quarter

Avon

Sales at Avon Products Inc. (AVP—NYSE) continued to decline in the second quarter, but the beauty company’s lagging North America division posted its first quarterly profit in several years.

Second quarter revenue fell 17 percent to $1.8 billion, weighed down by currency pressures in several foreign markets. On a constant-dollar basis, overall sales remained flat, with growth in Russia and the Philippines offset by declines in Brazil, China and the U.S.

The New York-based company reported adjusted earnings of 11 cents a share, surpassing the 7 cents predicted by analysts but dropping 20 cents from a year ago.

Heavy cost-cutting initiatives are paying off for the company in North America, where it saw a modest profit for the first time since the first quarter of 2012. Despite an improving bottom line, the number of Avon sellers in North America fell 16 percent from the second quarter of 2014. Overall, the brand’s salesforce shrunk by 2 percent from a year ago.

Avon said its expectations for the full year remain the same. The company forecasted modest constant-dollar revenue growth, with continued negative effects from currency exchange rates.


After 30 Years, Longaberger Convention Returns to Small-Town Roots

LongabergerThe Longaberger Homestead in Dresden, Ohio.

Annual salesforce conventions are a common practice among direct selling companies, but the gatherings themselves are as diverse as the companies they represent. For Ohio-based basket maker The Longaberger Co., this year’s event was a literal return to the company’s roots and a celebration of its four-decade history.

Now a part of the CVSL family of brands, Longaberger got its start in the village of Dresden, home to the company’s manufacturing plant and a shopping, dining and entertainment destination known as the Longaberger Homestead. Dresden also hosted this year’s Longaberger convention, held July 23–25. Known as The Bee—think quilting or spelling—the meeting has taken place in Columbus for the past 30 years.

“Probably the most important factor was that we were really trying to get back to our roots and tell the story of the craft, as well as the small town in Ohio where all this was born,” Longaberger’s Director of Communications, Brenton Baker, told DSN. “We realized we were at odds with ourselves, talking about the charm of the Homestead and village but asking people to come to a cold convention hall in Columbus.”

In addition to visiting the Homestead and meeting the craftspeople behind Longaberger’s handmade baskets and home goods, the crowd of approximately 1,000 heard from Longaberger’s new CEO, CVSL Vice Chairman John Rochon Jr. Rochon stepped in following Tami Longaberger’s exit in May.


Herbalife Members Give Blood, Give Back with Red Cross Partnership

HerbalifeHerbalife kicked off its Red Cross partnership with a blood drive during its convention in St. Louis.

The 25,000 members who recently attended Herbalife’s North America Extravaganza in St. Louis helped the nutrition company kick off a new partnership with the American Red Cross. Herbalife held a two-day blood drive during the annual meeting, which had an estimated $18 million impact on the local economy.

In addition to sponsoring a blood drive, the company announced it is donating 280,000 Herbalife protein bars, which will be available at select blood drives and blood donation centers by the end of this month. This fall, the Los Angeles-based brand will launch a grassroots social media campaign to raise funds for the American Red Cross.


ARIIX Announces Merger with Nutrition Brand Voluxa

ARIIX, a wellness and personal-care products company, recently announced a merger with Voluxa, a marketer of antioxidant-rich nutrition products that was founded just last year. As a result, the two companies have combined their product portfolios and sales networks.

After three years in business, ARIIX joined the top direct selling companies in the world on the 2015 DSN Global 100. The Utah-based brand ranked No. 95, based on 2014 revenue of $73 million. Prior to the merger with Maine-based Voluxa, ARIIX’s representative count had topped 35,000. ARIIX has previously expanded its business through a series of mergers with smaller health-focused brands, including Trivani Intl., ZENVEI, HAVVN and RevvNRG.


$50K Primerica Grant Will Equip At-Risk Teens for the Future

The Orange Duffel Bag InitiativePrimerica CEO Glenn Williams presents a grant award to The Orange Duffel Bag Initiative.

During its 2015 Convention in July, Primerica brought home the event’s theme—“Freedom Redefined”—with the announcement of a $50,000 grant that will equip at-risk teens for future success.

CEO Glenn Williams presented the grant award to Sam Bracken, Co-Founder of The Orange Duffel Bag Initiative (ODBI), an organization Primerica has supported since 2013. ODBI helps Georgia teens who are homeless or aging out of the foster care system, often without the means or skills necessary to support themselves. ODBI’s team of certified life and executive coaches provides coaching, training and ongoing advocacy to these youth.

The Orange Duffel Bag Initiative grew largely from Bracken’s own experiences. Though he would later become a star football player for Georgia Tech and an executive with FranklinCovey, Bracken was once a homeless teen who could carry everything he owned in an orange duffel bag. He has shared his experiences in My Orange Duffel Bag: A Journey to Radical Change, a book he co-authored.


Q&A:

Herbalife VP Talks Member Meetings with Congress

Eric RosenEric Rosen

Amid ongoing scrutiny from regulators and the press regarding its business practices, Herbalife is taking every opportunity to tell its own story to the public and policymakers.

In July, a dozen Herbalife members traveled from five states to Washington, D.C. Their mission: to meet with representatives in Congress and personally communicate their experiences with the nutrition company—the kind of legislative relationship building promoted by the Direct Selling Assocation. To learn more about Herbalife’s meetings with Congress, DSN reached out to Eric Rosen, Vice President of U.S. Government Relations at Herbalife.

DSN: What was the main takeaway these members hoped to communicate to their representatives?

ER: Our members visited their elected officials to talk about the real way Herbalife is helping them live healthier, more active lifestyles and supporting them to own their own business.

Each Herbalife member around the country works hard to have a healthier lifestyle, and in some cases, have their own businesses. Being in Washington, D.C., gives our members the opportunity to share their stories with elected officials and educate those in Washington about the important role Herbalife plays in their lives.

DSN: What was a highlight of the day?

ER: There were a lot of beautiful moments from our fly-in, but the conversation between Andres Gaspar, an Herbalife member from Alabama, and staff in the Office of Representative Gary Palmer (R-AL) was particularly memorable. Andres was very emotional when he talked about his previous work doing manual labor to support his family, including seven children. It was hard work and never enough, but through Herbalife, dedication and discipline, he now has the means to provide a good home and education for his family while promoting a product that is helping his community live a healthier life. He went on to say that for an immigrant like himself, this was more than he could ever dream. It was clear that the congressional staffer understood the deep impact Herbalife has had on the entire Gaspar family and the high regard they have for the quality of the product.

DSN: Does Herbalife plan to coordinate these meetings on a regular basis?

ER: Our fly-in program has allowed people from around the country to come to Washington, D.C., and represent their fellow 550,000 Herbalife members in meetings with elected officials. Through our fly-ins, we have empowered our members by helping them speak directly to their congressional representatives. We plan on continuing this program going forth.

DSN: What else is Herbalife doing right now to educate lawmakers about its business model?

ER: Herbalife’s efforts to explain its role as a global nutrition leader to policymakers in Washington and around the world are ongoing. We visit with elected officials in their districts, in the halls of Congress, and at events around the country to make them aware of the opportunities Herbalife products offer people who are interested in living healthier lives and working towards personal financial goals. We will continue to seek creative ways to give lawmakers a chance to interact with our products and learn more about Herbalife.