Shaklee

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 Miami, Florida, with operations in several countries.

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. In 1956, Shaklee founded the Shaklee Corporation with his two sons to manufacture nutritional supplements. Shaklee chose the multi-level marketing business model to market their product. Starting in 1956, Shaklee began marketing organic, biodegradable cleaning products.

Expansion, divestiture, and changes of ownership

Shaklee Corporation was a publicly traded company in the late 1970s and was listed on the New York Stock Exchange. In 1973, the firm relocated its business offices from Hayward, California, to the Watergate office complex in Emeryville. In 1980, the company relocated again to the One Front Street skyscraper in San Francisco's Financial District. In 1982 Shaklee was included in the Fortune 500 list. The company expanded its business operations in 1986 by acquiring Bear Creek Corporation, a direct marketing firm known for its Harry and David Fruit-of-the-Month Club, from RJR Nabisco for $123 million. In 1989, Shaklee sold a 78 percent stake in Shaklee Japan to the Yamanouchi Pharmaceutical Company for $350 million while retaining a licensing agreement and continuing to collect royalty payments from the Japanese operations.

In March 1989, Shaklee Corporation received an unsolicited acquisition proposal from a group led by Minneapolis financier, Irwin L. Jacobs. At the time, analysts estimated Shaklee Corporation's potential leveraged buyout at $35 a share. The Jacobs group had acquired a 14.98 percent stake in the company. Shaklee declared a special dividend of $20 a share. Some observers viewed this as a " poison pill" defense against the takeover, although the company stated otherwise. Shaklee's corporate bylaws included provisions that were triggered when an investor reached a 15 percent ownership threshold.

Shortly after, Jacobs increased his stake, however Shaklee Corporation subsequently announced its acquisition by Yamanouchi Pharmaceutical for $28 per share in a deal valued at approximately $395 million. Yamanouchi's existing partnership with Shaklee Japan was cited as a factor in the acquisition. Following the announcement, Jacobs declined to challenge the offer and the acquisition was finalized, making Shaklee a privately held company. In 2000, the company moved its headquarters from San Francisco to Pleasanton, California.

In 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. Around the same time, Bear Creek and the Harry and David line was sold to investment firm Wasserstein Perella & Co. for $260 million.

Shaklee has made environmental sustainability a part of its public brand messaging. In 2022, the company announced the launch of a body care collection described as "clean" and “anti-aging.”

FTC actions

In 1974, Shaklee Corporation agreed to stop marketing its product "Instant Protein" as suitable for infants and to discontinue claims that misrepresented the product's protein content, following an order from the Federal Trade Commission (FTC). In 1976, the FTC sanctioned Shaklee again for pressuring its distributors to maintain or advertise suggested retail prices.

Controversy about Shaklee Distributors

In 2012, New England distributor John "Jack" William Cranney was charged with using the reputation of his 45-year affiliation with Shaklee to solicit financial investments from other Shaklee distributors beginning in 2002. In July 2012, the Massachusetts Securities Division charged Cranney with implementing a financial investment Ponzi scheme to defraud 36 victims in multiple states of roughly $10.4 million and for using the funds for personal gain. Shaklee immediately suspended distributor payments to Cranney estimated at $45,000 per month. Several victims sued Cranney to recover damages and he sought federal bankruptcy protection for his home, valued at $3 million. 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. 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.

Cycling partnerships

From 1988 to 2000, Shaklee sponsored a UCI professional cycling team managed by Frank Scioscia. In its final year, the team was the top-ranked UCI tier III team globally and included U.S. Olympic cyclists members Jamie Carney, Jonas Carney, Adam Laurent, and Kent Bostick. It is not publicly confirmed whether the team used Shaklee products.

Customer partnerships

NASA: Joint sponsored research agreement

In 1993, Shaklee entered into a multi-party, research and development with NASA, San Francisco State University, and Bionetics Corporation for the research and development of high capacity rehydration fluids for astronaut use during extravehicular activity and reentry. The project was led by Dr. John Greenleaf of the NASA Ames Research Center. Shaklee received the right for an exclusive license from the NASA formulation.

By the end of 1993 and through the end of the NASA shuttle program, Shaklee provided NASA with a customized version of the resulting rehydration beverage, Performance, under the name Astro-ade for use by Shuttle astronauts.

References

External links

Corporate web site
New York Times, April 22, 2007
"James Whittam, 49, President And Chief of Shaklee Companies"
New York Times, May 3, 1999

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Companies based in Pleasanton, California
Retail companies established in 1915
Privately held companies based in California
Nutritional supplement companies of the United States
1915 establishments in Iowa
Multi-level marketing companies