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Shaklee Corporation
Company typePrivate
IndustryWellness, Personal care, Multi-level marketing
Founded1956
FounderForrest C. Shaklee
HeadquartersPleasanton, California
Key people
ProductsNutrition, Weight management, Beauty, Household
Websitewww.shaklee.com

Shaklee Corporation is an American manufacturer and multi-level marketing distributor of natural nutrition supplements, weight-management products, beauty products, and household products. The company is based in Pleasanton, California with global operations in Canada, China, Indonesia, Japan, Malaysia, and Taiwan.

On November 30, 2018, Shaklee suspended its operations in Mexico after 26 years.

History

Founding

Forrest C. Shaklee (1894–1985), a chiropractor and nutritionist based in his home state of Iowa, and later in Oakland, California, created the first vitamin in the United States labeled "Shaklee's Vitalized Minerals" in 1915.[1] In 1956, Shaklee founded the Shaklee Corporation with his two sons to manufacture nutritional supplements.[2] Shaklee chose the multi-level marketing business model to market their product.[3][4] Starting in 1956, Shaklee began marketing organic, biodegradable cleaning products.

Expansion, divestiture, changes of ownership

Shaklee Corporation was a publicly traded company in the late 1970s and was listed on the New York Stock Exchange. In 1980, the firm relocated its headquarters from an office complex on the Emeryville marina to a state-of-the-art skyscraper in downtown San Francisco's Financial District. In 1982, Shaklee became a Fortune 500 Company. The corporation began to diversify in November 1986 when it purchased the Bear Creek Corporation, a direct marketing company best known for its Harry and David Fruit-of-the-Month Club operation, from RJR Nabisco for $123 million.[5] In February 1989, Shaklee sold its 78 percent interest in Shaklee Japan to the Yamanouchi Pharmaceutical Company for $350 million, while maintaining its licensing agreement and continuing to collect royalty payments from the Japanese operations.[6]

In March 1989, Shaklee Corporation received an unsolicited acquisition proposal from a group led by Irwin L. Jacobs, the Minneapolis financier known also by his nickname "Irv the Liquidator". Analysts placed the leveraged buyout value of Shaklee at $35 a share. The Jacobs group had been aggressively accumulating Shaklee shares, and disclosed it currently held a 14.98 percent stake in the San Francisco-based company. Shaklee immediately declared a special dividend of $20 a share, seen as a poison pill—a way to discourage takeover interest in Shaklee, although the company disputed that view. Shaklee's anti-takeover provisions came into play when an investor reached 15 percent.[7]

During the next few weeks, Jacobs increased his stake in Shaklee,[8] however, Shaklee Corporation then announced it was being acquired by Yamanouchi Pharmaceutical for $28 a share in cash, or about $395 million. Yamanouchi's partnership with Shaklee in Japan helped make the transaction possible, and cast Yamanouchi as a "white knight" in helping Shaklee fend off the hostile takeover bid by Jacobs.[9] Jacobs announced he would not challenge the Yamanouchi bid[10] and the deal with Yamanouchi was quickly finalized,[11] making Shaklee a privately held company. In the spring of 2000, the company relocated its headquarters from downtown San Francisco to a new complex in suburban Pleasanton.[12]

In April 2004, Yamanouchi sold Shaklee Corporation to American multi-millionaire Roger Barnett, managing partner of Activated Holdings LLC and a member of the Wolfson family, for $310 million. Bear Creek and the Harry and David line was sold to Wasserstein Perella & Co. for $260 million.[13][14]

Shaklee promotes itself as a company committed to being green.[15][16][17][18][19][20] In 2022, Shaklee announced the introduction of its clean, anti-aging body care collection.

FTC actions

In 1974, in response to Federal Trade Commission order, Shaklee agreed to cease the marketing of its product "Instant Protein" as appropriate for infants, and to cease misrepresentation of the amount of protein in "Instant Protein."[21] Shaklee was further sanctioned by the FTC in 1976 for "requiring, coercing, threatening, or otherwise exerting pressure" on its distributors to maintain or advertise suggested retail prices.[22]

Controversy about Shaklee Distributors

In 2012, New England distributor John "Jack" William Cranney was charged with leveraging the reputation of his 45-year affiliation with Shaklee to solicit financial investments from other Shaklee distributors, his family and his friends, beginning in 2002.[23][24] In July 2012, the Massachusetts Securities Division charged Cranney with implementing a financial investment Ponzi scheme to defraud 36 victims in multiple states of about $10.4 million and for using the funds for personal gain.[25] Shaklee immediately suspended distributor payments to Cranney estimated at $45,000 per month.[26] Several victims sued Cranney to recover damages and he sought federal bankruptcy protection for his home, valued at $3 million.[25][27] Cranney lost the battle for his home and the proceeds from the sale were used to satisfy the claims of some of his alleged victims.[28] In September 2014, the FBI arrested Cranney in El Paso, Texas and charged him with four counts of wire fraud, 16 counts of mail fraud, and three counts of money laundering.[29]

Cycling team

From 1988 to 2000, Shaklee was the title sponsor of an American-based UCI professional cycling team managed by Frank Scioscia. In its final year of existence (2000), Team Shaklee was the top-ranked UCI tier III team in the world[30] and included United States Olympic Team members Jamie Carney, Jonas Carney, Adam Laurent, and Kent Bostick. There is no information listed as to whether or not the team members actually used Shaklee products.

Customers

NASA

Beginning in 1993 and through the end of the NASA shuttle program, Shaklee provided NASA with a customized version of its rehydration beverage, Performance, under the name Astroade for use by Shuttle astronauts.[31][32][33][34][35]

References

  1. ^ Shook, Robert L. (1982). The Shaklee Story (1 ed.). New York City, NY: Barnes & Noble Books. p. 22. ISBN 0064648036.
  2. ^ "Dr. Forrest Shaklee; Founded Corporation". The New York Times. December 17, 1985. Retrieved June 21, 2009.
  3. ^ "The History of MLM". First Class MLM. November 11, 2007. Retrieved June 21, 2009.
  4. ^ "2022-2023 Shaklee Incentive Booklet (U.S.)" (PDF). Shaklee. Retrieved August 13, 2023.
  5. ^ "Shaklee to Buy RJR Nabisco Unit". The New York Times. November 4, 1986. Retrieved June 21, 2009.
  6. ^ "Shaklee to Sell Japanese Stake". The New York Times. February 3, 1989. Retrieved June 21, 2009.
  7. ^ Fisher, Lawrence M. (March 4, 1989). "Shaklee Gets Takeover Offer From Jacobs". The New York Times. Retrieved June 21, 2009.
  8. ^ "Jacobs Increases Stake in Shaklee". The New York Times. February 25, 1989. Retrieved June 21, 2009.
  9. ^ Fisher, Lawrence M. (March 15, 1989). "Japan Drug Maker to Buy Shaklee". The New York Times. Retrieved June 21, 2009.
  10. ^ "Jacobs Cuts Stake in Shaklee to 10.5%". The New York Times. March 15, 1989. Retrieved June 21, 2009.
  11. ^ "Shaklee Offer Done". The New York Times. April 18, 1989. Retrieved June 21, 2009.
  12. ^ "History of Shaklee Corporation – FundingUniverse". www.fundinguniverse.com. Retrieved July 29, 2018.
  13. ^ "Japanese Drug Company To Sell 4 Units, Including Shaklee". The New York Times. April 3, 2004. Retrieved June 21, 2009.
  14. ^ "Wasserstein Haunts Harry & David in Buyout Doomed to Bankruptcy". Bloomberg Markets Magazine. October 11, 2011.
  15. ^ "Shaklee U.S. leads the way on global climate change issue". Shaklee, Inc. Retrieved January 26, 2012.
  16. ^ Ferla, Ruth La (April 22, 2007). "Eco-Socialites Make Cleaning Green a Priority". The New York Times.
  17. ^ "Shaklee wins 2009 Green Power Leadership Award". Shaklee, Inc.
  18. ^ "Shaklee wins 2009 Business Environmental Awards". Shaklee, Inc.
  19. ^ "Shaklee is on Top 20 Retail Partner List with the US Environmental Protection Agency's (EPA) Green Power Partnership". Shaklee, Inc.
  20. ^ "Shaklee wins 2008 Stevie Award". Shaklee, Inc.
  21. ^ Federal Trade Commission. "In the matter of Shaklee Corporation consent order, etc. in regard to alleged violation of the Federal Trade Commission Act" (PDF). ftc.gov/. FTC. Retrieved January 11, 2015.
  22. ^ Federal Trade Commission. "IN THE MATTER OF SHAKLEE CORPORATION CO:-SENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT" (PDF). ftc.gov. FTC. Retrieved January 11, 2015.
  23. ^ Healy, Beth. "Friends fight to recover money from Belmont businessman". Boston Globe. Retrieved March 23, 2015.
  24. ^ "John William Cranney: Notice of Adjudicatory Proceeding" (PDF). Commonwealth of Massachusetts. Retrieved October 10, 2015.
  25. ^ a b UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS EASTERN DIVISION. "MOTION OF UNITED STATES TRUSTEE TO CONVERT CHAPTER 11 CASE TO CHAPTER 7" (PDF). gpo.gov. Government Printing Office. Retrieved March 23, 2015.
  26. ^ Healy, Beth. "Belmont businessman pressed on funds in court: Jack Cranney says FBI seized records of losses". Boston Globe. Retrieved March 31, 2015.
  27. ^ Barrett, Stephan. "Prominent Shaklee Distributor Accused of Operating Ponzi Scheme". mlmwatch.org/. The Skeptical Guide to Multilevel Marketing. Retrieved March 23, 2015.
  28. ^ Healy, Beth. "Ex-Belmont businessman arrested on fraud charges". Boston Globe. Retrieved March 31, 2015.
  29. ^ Department of Justice, U.S. Attorney's Office, District of Massachusetts. "Former Belmont Resident Charged With $6 Million Investment Fraud Scheme". justice.gov. United States Department of Justice. Retrieved March 31, 2015.
  30. ^ "Shaklee Achievements and Milestones". Shaklee, Inc.
  31. ^ Wong, L. G. (December 1994). "Hypervolemia in Men from Drinking Hyperhydration Fluids at Rest and During Exercise" (PDF). NASA. Retrieved December 28, 2012.
  32. ^ Whittam, PhD, James H. (April 3, 1995). "Hypervolemia from Drinking Hyperhydration Solutions at Rest and Exercise" (PDF). NASA. Retrieved December 28, 2012.
  33. ^ Fortney, PhD, Suzanne M. (January 1994). "Fluid-Loading Solutions and Plasma Volume: Astro-Ade and Salt Tablets With Water" (PDF). NASA. Retrieved December 28, 2012.
  34. ^ Wong, L. G. (December 1994). "Drink Composition and CycleErgometer Endurance in Men: Carbohydrate, Na+, Osmolality" (PDF). NASA. Retrieved December 28, 2012.
  35. ^ "Shaklee Milestones". Shaklee, Inc. Retrieved December 28, 2012.

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