ViSalus

ViSalus

Traded as	Parent Company NYSE: BTH
Industry	Multi-level marketing
Founded	March 1, 2005 (2005-03-01)
Headquarters	Los Angeles, CA, USA
Number of locations	2
Area served	USA, Canada, UK
Key people	Ryan Blair, Co-Founder, Chief Executive Officer; Blake Mallen, Co-Founder and Chief Marketing Officer; Nick Sarnicola, Co-Founder and Global Ambassador;
Products	Dietary supplements
Employees	275[1]
Parent	Blyth, Inc.
Website	www.visalus.com

ViSalus is a multilevel marketing company based in Los Angeles, California, with offices in Troy, Michigan.^[2] ViSalus is a subsidiary of Blyth, Inc. The company markets weight management nutritional products, dietary supplements and energy drinks in the United States, Canada and UK through a network of approximately 76,000 independent distributors.^[3] Weight management products, including Vi-Shape meal replacement shake and Vi-Trim Clear Control Drink Mix, form the bulk of the company's sales.^[4]

History

ViSalus Sciences was originally started in 1997 as The Free Network, LLC, a long-distance Network Marketing company founded by David Rutz in Troy Michigan. In 2001, Rutz left the company to start a different Network Marketing company. Later, in 2005, the company officially changed it's name to Visalus Sciences yet remains headquartered in Troy, MI. Sarnicola and Mallen were distributors for The Free Network prior to being named "founders" of Visalus. In March 2005, Sarnicola and Mallen began promoting ViSalus full-time, in Northern California.

In 2008, ViSalus was acquired by Blyth, Inc. In the first stage of the takeover – completed in 2008 – Blyth purchased a 43.6% equity interest for $14.0 million.^[4][5] Blyth completed the second phase of the takeover in 2011, investing an additional $2.5 million and increasing their ownership share to 57.5%.^[6]

The 2008 recession put ViSalus near bankruptcy, with the business $6 million in debt.^[7] Ryan Blair, the company's CEO – a reformed gang member turned entrepreneur^[8] – steered ViSalus back to profitability, investing his last million dollars in the business. By 2010, when Blair was awarded the DSN Global Turnaround Award for his role in reversing the company's fortunes, ViSalus was making over $15 million a month.^[8]

In 2013, Visalus launched in the United Kingdom.^[9]

Controversy

In August 2012, Blyth – which then owned a 73% share of Visalus – 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,"^[10][11] and Blyth withdrew the Visalus IPO citing uncertain market conditions.^[12]

In November 2012, Bernstein Liebhard alleged in a class action lawsuit that Blyth overstated the nature and viability of Visalus' strong financial results which masked declining performance in Blyth's other operating units. The suit alleged that Blyth officers and directors violated the Securities Exchange Act by issuing materially false and misleading statements regarding Blyth's financial performance.^[13]

CNBC Commentator Herb Greenberg said ViSalus walks "a controversial line between legal direct selling and pyramid scheme."^[14]

Criticisms

ViSalus 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, as reported by The National Council Against Health Fraud in their journal Consumer Health Digest (2013).^[15]

Products

Weight-management products, including Vi-Shape meal replacement shake, Visalus Go Instant Energy and Vi-Trim Clear Control Drink Mix, form the bulk of the company's sales.^[4] Other products include Neuro, an energy drink, and Vi-Pak, an energy supplement, which was developed by Dr. Michael Siedman, an ear, nose and throat specialist.^[2] Visalus promotes its products with the Body by Vi Challenge, a weight loss initiative encouraging people to lose weight and achieve fitness goals over a 90 day period.^[16][17][18]

Charitable activities

The Body By Vi Community Challenge is a program in which the company matches customers' contributions of Visalus products to regional food banks.^[19] The company also sponsored the Game of Life Basketball Camp, a one-day children's summer camp in Memphis, Tennessee.^[20]

References