Statement from Herbalife in Response to Bill Ackman's Three-Hour Presentation on Nutrition Clubs
22 Juli 2014 - 8:59PM
Business Wire
Herbalife Ltd. (NYSE:HLF) today issued the following statement
in response to Bill Ackman’s three-hour, presentation on the
Company’s nutrition clubs:
Herbalife is a 34-year old nutrition company
with 7,400 employees worldwide and millions of members. Today, Mr.
Ackman highlighted many of the reasons we are proud of our company,
our record and the value we bring to members, consumers and
communities around the world. His presentation reaffirmed that:
- Herbalife is first and foremost a
company with great products that people want.
- There are hundreds of thousands of
members and millions more consumers who choose Herbalife for our
products and community-based approach to health and wellness.
- There is a comprehensive training
system for members who aspire to open their own nutrition club so
that they are fully informed of the time, commitment and skills
required to do so.
Once again, Bill Ackman has over-promised and
under-delivered on his $1 billion bet against our company. After
spending $50 million, two years and tens of thousands of man-hours,
Bill Ackman further demonstrated today that the facts are on our
side.
We will continue to focus on our mission of
bringing good nutrition and economic opportunities to communities
across the globe. We recognize that he is running out of time to
make good on his bad bet against Herbalife, with the equivalent of
25.7 million shares in put options that expire on January 17, 2015.
Today is evidence that Bill Ackman will not succeed.
To clarify, a couple of points:
- We are proud that our members are
required to participate in training before deciding to open a
nutrition club. Our training approach – sometimes referred to as a
“university” – is similar to the training model that has been
deployed by numerous consumer-facing companies.
- Club 100 was a program that contained
many of the best elements of nutrition clubs,
including education, mentoring and fiscal responsibility.
These elements are the cornerstone of our clubs today. Herbalife is
proud of our members who use nutrition clubs as an important tool
of social support to achieve good nutrition and a healthy active
lifestyle.
- Mr. Ackman’s claim about the earnings
of Herbalife nutrition clubs is completely false and fabricated. In
fact, according to a recent study commission by the Company, 87.5%
of nutrition club operators feel good about the money they earn and
92% want to continue with their club.
In a separate release today, Herbalife today released the
findings from research and analysis conducted by Walter H. A.
Vandaele, Ph.D. of Navigant Economics, LLC regarding Herbalife’s
U.S. business operations. Dr. Vandaele, engaged by the Company to
conduct this economic analysis, assessed whether Herbalife’s
operations appropriately are classified as a beneficial, legitimate
Multi-Level Marketing (“MLM”) firm.
Dr. Vandaele is an economic expert with significant experience
in, among other areas, the regulation and operations of firms in
the consumer goods industry. Among his many professional
accomplishments, he has previously served as Economic Advisor to
the Director, Bureau of Competition and as Assistant Director for
Regulatory Evaluation, Bureau of Consumer Protection at the U.S.
Federal Trade Commission (“FTC”).
Among his numerous determinations, Dr. Vandaele concluded that,
“Herbalife’s U.S. business operations are consistent with the
socially beneficial MLM model and inconsistent with the socially
harmful pyramid scheme model.”
About Herbalife Ltd.
Herbalife Ltd. (NYSE:HLF) is a global nutrition company that
sells weight-management, nutrition and personal care products
intended to support a healthy lifestyle. Herbalife products are
sold in more than 90 countries to and through a network of
independent Members. The company supports the Herbalife Family
Foundation and its Casa Herbalife program to help bring good
nutrition to children. Herbalife's website contains a significant
amount of financial and other information about the company at
http://ir.Herbalife.com. The company encourages investors to visit
its website from time to time, as information is updated and new
information is posted.
Herbalife Ltd.Amy Greene, 213-745-0474SVP, Investor, Corporate
and Government RelationsorBarbara Henderson, 213-745-0517SVP,
Worldwide Corp. Communications
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