ViSalus Sciences is an American multilevel marketing (MLM) company based in Los Angeles, California, with offices in Troy, Michigan. The Company markets nutritional products for weight management, energy and energy supplements in the United States, Canada and the United Kingdom. As of September 2014, the company has a network of approximately 31,000 independent distributors. Heavy management products, including Vi-Shape food replacements and Vi-Trim Clear Control Drink Mix, make up the bulk of the company's sales. A class action suit 2016 alleged extortion and fraud pyramid sales distribution rights scheme.
Video ViSalus
Histori
ViSalus Sciences was originally started in 1997 by Nick Sarnicola and Blake Mallen, two distributors with The Free Network, LLC, a telco MLM company based in Troy, Michigan. After The Free Network was folded in March 2005, ViSalus was purchased by wireless Internet developer Ryan Blair with an investment from Ropart Asset Management, a private equity firm owned by Robert B. Goergen. Sarnicola and Mallen are retained as heads of sales and CMO, respectively. The company was moved to the San Francisco Bay Area.
The 2008 recession left ViSalus almost bankrupt, with a $ 6 million business debt. In 2008, ViSalus was acquired by Blyth, Inc., a multi-level marketing company that sells home décor set up by Georgen. In the first phase of the takeover - completed in 2008 - Blyth bought a 43.6% equity interest for $ 14.0 million. In 2010 the company has returned to profitability, and ViSalus earns more than $ 15 million per month. Blyth completed the second phase of the takeover in 2011, investing an additional $ 2.5 million and increasing its share of ownership to 57.5%.
In August 2012, Blyth - which then owns 73% of Visalus shares - plans to spin off the company in an initial public offering worth up to $ 175 million. In September 2012, Moody's Investors Service downgraded Blyth's credit rating from "stable" to "negative," ViSalus reported a very high growth rate in 2012, audited at 450%, making it one of the fastest growing companies in its size. Blyth stated that the growth of the company is not well rewarded. Blyth drew the Visalus IPO citing uncertain market conditions. According to Detroit Free Press , one of the reasons why the Visalus IPO was canceled was because co-founders falsely inflated sales figures: "ViSalus has been criticized for allegedly exaggerating its record sales in 2012 by recruiting top product distributors at industry like mercenaries, these distributors are said to be willing to replace affiliates at a price, and once ViSalus reaches its peak, they jump to other direct selling companies, such practices will be legal. "
In 2013, ViSalus was launched in the UK. On February 18, 2014, ViSalus announced its expansion into Germany and Austria.
In September 2014, ViSalus announced that it had become an independent private company. ViSalus set up a transaction with Blyth to convert the company's shares into common stock, although Blyth remains a shareholder with a 10% stake in ViSalus. The transaction eliminates Blyth's obligation to pay the founders $ 143.2 million as part of the 2008 acquisition. At the time of the transaction, ViSalus' revenues and revenues have declined from a peak point in 2012, and the company has been operating at a loss for 2013 and the first two quarters of the year 2014. After becoming private, ViSalus stops reporting sales figures.
According to Detroit Free Press, Visalus is in 114,000 distributors in the summer of 2012. According to a report at Crain's Detroit Business, Visalus has 76,000 distributors in June. 2013, which declined to 31,800 distributors in September 2014. The article also reports that Sarnicola is the largest distributor in Visalus, with its distributor team contributing 74% of the company's revenue. In 2016 the company laid off 87 workers at its Troy facility, after years of declining sales and legal issues.
Maps ViSalus
Controversy
Hacking
In October 2013, the indictment was filed in the US Federal Court that Nick Sarnicola and Blake Mallen on behalf of ViSalus violated the Rape Law and Corruption Organs (RICO) Act, involving 3rd-party individuals to commit crimes, extortion and other offenses against Fred Ninow & amp; ; Ken Dunn of Ocean Avenue.
In the lawsuit, Ocean Avenue, a competitive nutrition sales company, accused ViSalus officials of hiring two private investigators in California, Nathan Moser and Peter Siragusa, who in turn made contracts with computer experts to illegally hack Ocean Avenue files , and formerly Distributor ViSalus who switched to Ocean Avenue at the end of 2012. ViSalus denies the allegations. In July 2015, two private investigators pleaded guilty to the indictment, which was a Federal offense with a one to three year sentence. ViSalus security director, Carlo Pacileo, was convicted and sentenced to trial for three years.
Pyramid scheme
In 2012, CNBC Commentator Herb Greenberg said ViSalus runs a "controversial line between direct legal sales and pyramid schemes."
ViSalus is investigated by the Southern Investigative Reporting Foundation which publishes detailed reports that attack the company's business model and the high probability that investors will lose their money in the scheme.
In April 2016, a class action lawsuit was filed against ViSalus, Robert Goergen, Sr., Todd Goergen, Nick Sarnicola, Blake Mallen and Ryan Blair in the United States District Court for the Eastern District of Michigan accusing fraud and fraud pyramid schemes of sale of distribution rights.
Products
Weight management products, including Vi-Shape food replacement shocks, Visalus Go Instant Energy and Vi-Trim Clear Control Drink Mix, make up the bulk of the company's sales. Other products include Neuro, energy drink, and Vi-Pak, an energy supplement, developed by Michael Siedman, ear, nose and throat specialist. Visalus promotes its products with Body by Vi Challenge , a program in which people set a target of weight loss and physical fitness to be achieved over a 90-day period.
References
Source of the article : Wikipedia
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