OpTree

As we told you a few months ago, direct sales company Home Interiors and Gifts, has been struggling in the past year with declining sales, and a dwindling workforce. The company recently filed for bankruptcy protection. Now it seems they are on their way out.

The home goods company filed officially for Chapter 11 protection in April, and then began a restructuring of the company which included hiring Robin Crossman, a direct sales vet to help rebuild. Unfortunately, the company never got back on its feet. In June they were forced to lay off many employees and now it is looking to sell its operating entities. The Dallas based company announced that they are seeking approval from the U.S. Bankruptcy Court of the Northern District of Texas to sell its operating entities.

The home interiors and gifts company is looking hire investment banking firm Houlihan, Lokey Howard and Zukin Capital, Inc. to help with the sale. The company feels that the sale is the best way to get the highest return for the company’s stakeholders. .

A spokesperson for the company says that its operation in the U.S, Canada and Puerto Rico will be sold as one single unit while its Mexico and Domistyle, Inc subsidiary which is a home fragrance manufacturer will be sold as independent entities.

I’m not expert, but it seems like the company has been struggling for a looooong time and thing seem to be getting progressively worse, and not better. If I were a distributor of the company, I might think twice about staying involved, we all remember what happened with Weekenders. While I’m not sure if distributors have been notified by the company, at least the company itself has made the news public.

And….by the way…….Home Interiors and Gifts is a member of the DSA, yet there is no news on their site of the problems at the company. Good to know that once again the DSA is protecting their members and consumers by failing to report news on one of its member companies selling its assets.

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Direct Sales Clothing Company, Weekenders has apparently gone out of business. While reports are a bit fuzzy, it seems that the company filed for bankruptcy protection last week, and then without any notice, closed its doors, yet the website is still active?

The Toronto based company, founded in 1984 by George Raynault and Bob Bailey has apparently been struggling for years now. Weekenders has representatives in the US, Canada, The Netherlands and the UK. There has been some talk lately of the company’s problems and even hints that the closing might be inevitable. However, recently the company launched their spring/summer line and it seemed that they would find a way to re-build. That was not to be however and last week, AFTER the closing, a letter was sent out by Weekenders Canada President, Lia Keeping, to distributors after the company had already shut down, with an explanation for the closing……

Dear Managers and Coordinators,
It is with much sadness that I tell you effective immediately, Weekenders Global has declared bankruptcy. Our owners have ceased all operations in all countries effective immediately. We all know that our company has been struggling for the past few years. Unfortunately, the end has come, faster than anyone could have predicted and I still find it hard to believe, as I was informed at 11:30 this morning. This is not the way I wanted to tell you, unfortunately, due to circumstances beyond my control, I did not find out in time to set up a call or to call you directly as I would have wished, please understand that..
We are doing everything possible to fill all orders and backorders for orders received up to and including noon today Monday, June 9.

I want each and every one of you to know how much the past 23 years have meant to me, how much YOU have meant to me. You have helped me grow both personally and professionally and in so many ways. The opportunity that Weekenders provided has been the best thing that ever happened to me and to you too! You are a dynamic, knowledgeable, classy, fun and utterly fantastic group of women. I am so thankful to have known you, worked with you, cried with you and most of all laughed with you.

I am so proud of you, what you have accomplished and the amazing skills that each and every one of you possess. Take pride in who you are, always remember how proud and privileged I am to have been your friend, your colleague, your coach and your President. I hope you remember all the fun we had together and I am sure our paths will cross again.
Please know, I am ok and I want you to be to. I love you.

I’m not sure this letter is much of a consolation to the thousands of distributors, many of whom say they are owed thousands in back orders and commissions. I also think it’s incredibly self serving to assure everyone that you are ok, yet there are thousands who have no answers at all. I’m sure we will hear more in the company weeks about exactly what happened and the role the execs at the company played in its downfall. It is unfortunate to hear stories like this and while it is not unusual for companies to struggle and even close their doors, it hurts the direct sales industry tremendously when irresponsible companies shut down without warning, leaving their employees stranded. In the meantime, the company should at least take down its website so that nobody else gets involved….

Let this serve as a notice to all operators of Network Marketing companies. You have a responsibility to ALL of the people who both develop your products and represent them. This is a people business and the reason the industry gets such a black eye is because of crappy actions like this one by Weekenders. It is beyond comprehension how people can live off the labor of others and yet when things get bad, you just up and leave without going through a respectable and professional manner to unwind the company. Yes, it is harder to face the thousands of people you have disappointed (and gotten wealthy from) but what you have just done by walking out on all of them is destroyed any credibility you thought you may have. The ending to your notice to the loyalists is a complete joke. No, you are not well - you are a coward and to tell people that the end came faster than you knew is completely impractical and no one with half a business mind could comprehend that. These people gave their time and commitment to you and Weekenders and the best you can do is tell them you are “ok” and want them to be as well. Return their money, pay all the back-owed commissions and shut down your website, then we can start the healing process and be on our way to being “ok”.

UPDATE: (6/24/08)
Ok, here is what we have been able to find out thus far. Weekenders does NOT seem to have filed for bankruptcy protection, yet - at least not in the US (which they would be required to do since they have a business license in the US). All searches of public records have produced nothing. However, since the company is actually registered as a Canadian company based in Richmond Hill, Ontario, we have been unable to search any public records there because they dont publish them online.

We also reached out to the Direct Selling Association (which Weekenders is/was a member of). The organization has not gotten back to us as of this update. It is a bit unusual that the DSA doesnt have a single mention on their website about one of their members going out of business and no information for distributors yet the headline of “In the News” is a 72 year old lady winning her 15th Pink Cadillac - seems pretty frustrating given the Associations mantra of “ethics, trust, confidence”.

We have called the Weekenders Corp office here in the US and Canada several times and just get a busy signal - the phone number we have is 905-886-5995. There is also another number of 847-478-0077 which doesnt seem to work either. Also, we were able to pull up an administrative contact named Shaun Langley who seems to use an email address of davidd@weekenders.com

The Canadian Weekenders website is down but US, UK and others are still live and still pitching the opportunity in their “Message“.

We will continue to provide more information as we get it.

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In a final decision handed down April 10th by the U.S. Court of Appeals, Seasilver must pay $120 million dollars for failing to comply with an earlier order to pay $3 million in consumer redress.

This will hopefully be the final ruling in a case that has been going on since 2002 when the FTC and FDA joined forces to put an end to Seasilvers fraudulent claims. The investigation into Seasilver was part of operation “cure-all” which was a joint effort by the FTC and FDA to put an end to health related fraud in the marketplace.

Seasilver claimed that’s its nutraceutical products could cure over 650 diseases, including AIDS, and that Seasilver would lead to significant and permanent weight loss. Seasilver, which is a combination of Aloe Vera extracts, combined with herbs, cranberry (the original superfruit), and phyto-silver sea vegetables.

Seasilver was founded in the 1980’s by Jason and Bela Burkes. While originally the company claimed that their miracle panacea was available through medical professionals, the company went through a restructuring in the mid 90’s and in 1994 relaunched using a multi-level marketing platform.

After joining together with the FDA to seize over $5.3 million in inventory in 2003, the FTC brought Seasilver to court claiming the company made false statements and violated several FTC guidelines about manufacturing plant safety both for equipment and employee safety. The company was barred from making false claims and a $120 million judgment was handed down against them that would be suspended if they paid $3 million in consumer redress in a specified time.

Needless to say, the company and the Berkes’ did not pay the fine and in 2006 was ordered to pay the full $120 million dollar judgment. The defendants appealed the decision, but to no avail as the U.S. Court of Appeals ruled April 10th 2008 that the 2006 ruling will hold up and the company must pay the full $120 million dollar fine.

In March 2003, Bela Berkes stated that Seasilver USA was earning $15 million a month and $180 million a year from selling Seasilver. The company is no longer in operation, although there are some resale sites where the product can be purchased from independent distributors.

This is by far the largest single dollar fine handed down to a Network Marketing company and should be a lesson to companies out there who make ridiculous claims that tarnish both the people who get suckered in but the industry as well.
Seasilver - You are officially in the OpTree Dead Pool Baby!

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