How The Global Phenomenon, Herbalife, Began
The global company, Herbalife International, sells skin-care, nutritional and weight loss products. Founded in 1980 as a one-man business, it now employs 4,000 staff members around the world. 2009 saw a turnover in excess of 2 billion US dollars. Its headquarters are based in the American city of Los Angeles.
Products are sold in over 70 countries by 2 million agents who work on a networking system. Apart from earning commission on product sales, many agents earn extra money through a multi-level marketing (MLM) structure.
The company started in modest fashion. Mark Hughes, the founder, sold his weight loss product from the trunk of his vehicle. On many occasions he said that his mother’s weight problem had prompted him to start the venture. It was his belief that her death was the result of an eating disorder accompanied by unhealthy attempts to lose weight.
Thanks to the MLM structure, the company grew rapidly and attracted many thousands of representatives who were happy to sell the products for commission on a door-to-door basis. Hughes shunned the idea of distributing to retail stores. ‘Lose Weight Now, Ask Me How’ became the company’s marketing theme and slogan. It was used in all advertising campaigns.
In the early days, the recruitment of agents was done by holding seminars that were presented by existing agents. They would talk about their successes and give testimonials on the products. Hughes gave a personal address at each seminar.
The company turnover in 1982 was two million US dollars thanks to its expansion into Canada. It became a member of NASDAQ (National Association of Securities Dealers Automated Quotations) in 1986. Then, 10 years down the line, in 1996, sales rocketed to one billion US dollars.
Mark Hughes died in 2002 at the age of 44. The autopsy results revealed that his death was caused by an overdose of an anti-depressant medication. In addition, a large amount of alcohol was in his system.
After Hughes’ death, Whitney & Co LLC and Golden Gate Capital acquired the company for 685 million US dollars. Growth continued unabated. One year later, the company appointed a new CEO, namely Michael O Johnson. He was prepared to leave behind a 17 year career with Walt Disney Productions to accept the position.
Mark Hughes was aware of social responsibility and, as such, he established the HFF (Herbalife Family Foundation) in 1994. The HFF is a non-profit corporation that strives to improve the lives of children. This is achieved by supporting organizations that provide children with healthy nutrition.
To further this quest, in 2005 the HFF established the Casa Herbalife program. It formed partnerships with charities with the same concerns. The program derived its name from the HFF orphanage which was built in Brazil during 1998. Today, there are 52 affiliated programs in operation on 6 continents.
HFF frequently participates in relief efforts to help people affected by natural disasters. In addition to these efforts, Herbalife also sponsors many sports teams, athletes and sports events around the world. The list is far too long to mention, but it can be viewed on the internet.
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