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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Ignite, the direct selling arm of the Dallas based energy company, Stream Energy has just announced that they have been received their coveted acceptance into the Direct Selling Association.  Their membership was approved last week after a rigorous approval process. The Direct Selling Association is of course the leading organization for the network marketing/direct selling industry.

Following the deregulation of energy in the State of the Texas in 2005, Stream Energy, Ignite’s parent company, received a Retail Electric Provider permit from the Texas Public Utility Commission. Ignite was formed and recruited over 100,000 independent sales agents to market electricity to new customers. Stream and Ignite has just received permission to expand into Georgia and is looking forward to expanding further over the next year into other states where electricity has been deregulated.

Ignite is the first direct sales company in the energy trade business to become an active member of the Association. Ignite had to go through the obligatory one year review before being accepted into the Association. The DSA requires all companies to go through this to ensure that each company is in full compliance with the high ethical standards of the DSA’s Code of Ethics.

“The members of the Direct Selling Association pride themselves in their commitment to the highest standards of business ethics,” said DSA President Neil Offen. “By applying for membership in the association and going through a rigorous approval process, these companies are saying they take their ethical obligations to their field sales force and customers seriously and are willing to make a public pledge to that effect.”  It is this “rigorous approval process” that we have questioned given the fact that other members who have gone out of business (Weekenders) or are being sued by various government regulatory groups (YTB)

“We are very pleased that the Direct Selling Association has accepted our application for membership,” said Chris Domhoff, a founder of Stream Energy and Ignite. “The DSA truly sets the benchmark for business ethics in direct marketing. And that has been our goal from the very outset.”

The DSA claims that its Code of Ethics gives the industry the strongest self-regulatory codes in the direct selling business. The DSA claims that those codes help ensure that each company remains honest about its business practices and is honest about the efficacy of its products. The DSA also investigates any claims made against any member companies.

There are now 265 active and pending members of the DSA who have all promised to “comply with the strict rules and guidelines set forth by the company” - something which we at OpTree have put to question.

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We got word that defunct Weekenders has put its physical assets from its Ontario office up for auction.  The preview date is today from 10:00am - 5:00pm at 29 E. Wilmot St., Richmond Hill, Ontario

It looks like its everything from computers, servers, material, office furniture, etc.  What is amazing from the pics is that it looks like even the employees didnt get a lot of notice either considering there are mounds of papers on the desks - although it does look like some of the employees put stuff in boxes.

One thing that really worries us is that there is the potential for those computers to contain a lot of personal information on customers - names, addresses, credit card data etc. and selling that information can cause a LOT of potential problems.  Seeing how this company operated, I would be very cautious.

You can see pictures of all the items here.

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Well it was another crazy week with more unanswered questions related to Weekenders going out of business. While more and more distributors have begun selling their wares on eBay and Craigslist to recoup some money, still no word from the Direct Selling Association as to what happened or any insight.

There was a bunch of philanthropic news this week. mark announced a new campaign with spokesperson Lauren Conrad and Neways donated over 10,000 bottles of water for the Utah Summer Games.

In financial news, supplement company Nutrilite announced that they crossed the $3B sales mark which is truly amazing and the S&P began a review of Tupperware’s stock based on its new rating but Mad Money’s Jim Cramer think the stock is a buy at this point.

USANA continues to confuse us. After getting rebuffed on their offer to take the company private by a special committee who said the offer was too low, Dr. Myron Wentz (the company’s chairman) decided to reaffirm the offer at the same price!! Makes no sense at all and all Wentz seems to be doing is driving up the value and making his bid seem less and less practical. It doesnt’ help that shareholders are starting to sue the company because of the low ball offer that he is proposing. This story is far from over.

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