Neways Said to Weigh Options Including Bankruptcy

  • November 20, 2011
  • By Team Business For Home

Direct Selling Company Neways said to Weigh Options Including Bankruptcy.

A review about Neways can be found here

Golden Gate Capital Corp.’s Neways, a maker of personal care and household products, is weighing restructuring options that would give control of the company to creditors, said three people with knowledge of the talks.

Neways, which defaulted on about $235 million of second- line loans that matured last week, is considering a bankruptcy filing or an out-of-court financial restructuring that would likely lead to Golden Gate losing control, said the people, who declined to be identified because the talks are private.

Creditors that would take over the company include SAC Capital Advisors LP, Z Capital Partners LLC, Silver Point Capital LP and American Capital Ltd. (ACAS), the people said. Golden Gate sought bankruptcy protection for another portfolio company, Orchard Brands, in January after attempts to sell the retailer failed.

“Neways has been actively engaged in negotiations with its lenders for several months and we hope to reach a mutually agreeable resolution as expeditiously as possible,” Meaghan Repko, a spokeswoman for the company, said in an e-mailed statement. “It remains business as usual at Neways and our operations will continue as normal throughout this process.”

Neways, which distributes health and beauty products in nearly 30 countries through a global network of about 500,000 independent distributors, was acquired by San Francisco-based Golden Gate for an undisclosed price in 2006. The Springville, Utah-based company has struggled with operations, including at its business in Japan, according to the people.

Peter J. Solomon Co. is advising Neways, said the people.

Spokesmen for Golden Gate, SAC Capital and Z Capital declined to comment. Silver Point, American Capital and Peter J. Solomon didn’t immediately return calls seeking comment.

Golden Gate, which manages about $12 billion, raised $3.5 billion for its Opportunity Fund last month, according to a person familiar with that investment. The private-equity firm made more than 10 times its $50 million investment in Herbalife Ltd. (HLF), another personal care retailer that went public in 2004, the person said.

Source Bloomberg:

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Comments (45)

    1. Neways is getting better through restructuring!
      Neways Enterprises (?the Company?), a world-wide leader in dietary supplements and personal care products, confirmed today that it is in negotiations with its lenders to refinance the Company?s capital structure. These negotiations have no effect on the day-to-day operations of the Company and it remains business as usual.
      The Future is bright!
      In fact, as previously announced, on December 12, 2011, we are continuing the Company?s Asian expansion by opening for business in Korea. In addition, Thailand will be launched later in 2012. Finally, the first steps are now complete for the launch of global seamless, scheduled to be complete by December 31, 2012. This will mean one check in your local currency* and Executive legs around the globe counting for qualification and recognition.
      *There is a regulatory requirement to pay 2 checks in Korea.

  4. Ted This is an Incredible article you and your team have posted thank you for this. Some of the most inspirational leaders I have had the privellage of spending time with are absolute mega stars with Neways. It is really daunting the incredible ferocity that financial institutions are having over our small time on this troubled planet.
    one can only assume the exposure to the bad debt of our false economy is forcing these lending institutions to squeeze everyone from my neighbour whom lost a home to a global success like Neways. One would hazard a guess that the crystal ball is indicating the collapse of the markets and yet another correction in the housing market in the weeks ahead.
    Good bye 80 inch plasmas and hello food coupons.
    On a better note I am sure the superstars of Neways will throw their arms around all the distributors and continue on the journey of freedom for life.
    Cheers Danny Michau
    from http://www.premierwellnesscompany.com

  7. Hi Ted,
    What a shocker but I guess it’s better the Distributors are made aware of the situation ahead of any total shutdown. Sad fact is though this is probably not the only company in the industry whose debts are growing faster that they are and surely emphasises the value of aligning your future with a debt free company with credible history which has been in business for at least ten years.
    I truly hope everyone is able to find a new home quickly, even as a ‘just in case the worst happens’ fall back – could be a bleak Christmas otherwise.
    Regards,
    John S
    https://www.theglobalpartnership.biz

  8. My best to all Neways Distributors, may this very sad news does not influence them stop believing in this amazing industry.
    Strong Corporate Leadership with wise decisions combine with strong ethic Leadership field leaders will always be a strong foundation to guaranty a long term lasting business. God Bless you all. Ali Boukhatem

  9. Not good news. I expect everyone affected to look at the leaders and product of their MLM companies once more. Is your product a good one? What are your Leaders doing , are they training their distributors? This is not too good for the industry.

  10. Very sad news indeed. I remember the same feeling when Jewelway went down over 10 years ago. I called a meeting 6 months prior with one of the Top Diamonds at the time and asked her/rather told her what was going to happen in 6 months! She was outraged and said I had no right to say that the company was going to fold but I could ‘smell the rat’ and I just wanted her to know that I could not continue or expect my team to continue when the clues were so obvious! I predicted it within 3 days! I love this industry and poor management/lack of cash is common in traditional business too, that’s why it’s taken me a long time to find another company that is debt free, has a proven track record with a sister company, has the perfect consumable product and a compensation plan that delivers fast & long-term. It’s crucial and I’m so grateful to be back in the game! This is an amazing ticket to ‘FREEDOM” , just do your homework! Much continued success everyone! https://myjavita.com/janajorgenson

  11. Wow, I hope they work it out. I use a couple products from this company where there is just no substitute, and have built some great
    friendships with some of the distributors globally. No matter what path I have taken, it has stemmed from Neways.

  13. I do feel sorry for the Neways distributor and I do understand how it feels! I?ve been there before. However I have for you the BEST business opportunity ever. We have something different with NO competition and we are NOT a nutritional company ? There are so many out there claiming “Health Miracles? and some of them have products which are BAD for your Health! Watch the online business presentation at http://www.gfgnetwork.com then contact me. Let?s give you something to SMILE about.

  15. It’s unfortunate for all the hard working distributors in Neway. Best of luck in your search for a new home in the Direct selling industry, Do you own research and don’t just join any that is thrown at you. Find one that is recession proof, socially friendly, leaders with great vision, currently in huge momentum right now, for the past 19 months has a average compounded growth of 25% or more, gives away Millions in FREE products and Prizes, an average customer base of 8 or more customers per distributor, simple and fun, pays weekly and one that makes you feel good by changing live and a retention of 88% or more. Find out by clicking my name and let’s get YOU in profit within hours to within couple days..

  16. Neways

    It is sad when these things come about. Hopefully the creditors will work out a deal that will allow Neways to continue.  The bottom line is if the reps were trained properly, sales were increasing, reps continued to increase income year over year & management handled money properly this would not be an issue.  If you are a disenchanted rep concerned about your future why not align yourself with a company that has stood the test of time & has grown over $2 billion in sales since 2008.  We have a marketing system that will teach you to be a professional marketer & make it simple for you to profit from day 1.   We will also teach you how to preserve your wealth so no matter what your future holds you are protected.

  18. I am very moved about how I think the Distributors feel, although it’s only in my own head and heart, not theirs. I am so sorry for your loss.

    I would be amiss were I not to show you another solid company in Ted’s top 20 opportunities: Global Wealth Trade. I invite you to explore this option as well at https://gwtopportunity.com/lexi1313. I am at the other end of the 18 minute company tour.

    Blessings to all, Bob

  20. The patient is unwell, but nowhere close to death, yet the vultures already circle. A little like reading the deaths column to find an apartment, except nobody has died. Classy.

  24. Saying, “It’s sad to hear about times like this”is not very comforting. Know that the writing is on the wall, so before your momentum wains, find the next stream, (of income) and jump in. It’s out there and flowing.

  26. This is indeed sad news. In Australia, Neways has been around a long time, and Iwas given to understand they were having a resurgance right now. I have to say, I have been a fan of having some extraordinary product as a flagship rahter than a big supermarket for direct selling, and I have aligned with companies that do this.

    I hope Neways survivies as there are some other big players in the queue.

    For now, I rest easy in a debt free company with an outstanding product. I hope others reading this are in a similar position. We need MLM in the current economic environment for personal financial security. I really hate big business as they squeeze the little people as hard as they can and swallow us up. MLM at least spreads the wealth around.

  27. I am so sorry to hear about Neway’s financial problems but this is not a black mark on Neway or the MLM Industry. It is just one of the casualities of this very volatile ecomony. As was released in the USA Today September insert, NetWork Marketing is here to stay. It is the safety net for millions of people worldwide. The 500,000 members of Neway have a decided advantage when out in the market looking for a new home, they have learned the ropes of network marketing, they have experience behind them that will move them quickly up the ladder of success, no matter what MLM company they join.

  28. Being involved with a company that carries so much debt is always risky. This is particularly the case for network marketing companies which are inherently unstable.

    Although Neways have good products, they could hardly claim to have a great pedigree. The Mowers set the tone originally with their down home folksy style, which didn’t migrate well to most international markets. Being charged and jailed for tax evasion cast a large shadow over the company.

    The writing is on the wall or Neways

  29. I am so sorry for the distributors of Neways Enterprises. I know that the strong will tally no longer and look to other sources of income. Here is a company with great leadership and awesome product that will take you to the top. Talk Fusion is a member of the highly accredited DSA and DSEI Please feel free to contact me for more details.
    To your success.

  30. I am one of the top leaders in the network marketing industry having had a business which has turned over in excess of US$100 million. This isn’t good news for any company but especially a network marketing company. Confidence in a long term opportunity is what gives new and existing distributors confidence to join and consume a product. I have seen so many companies go under because with this kind of news it’s very hard to recruit and sell with doubts of long term business. While Neways is a competitive company it is never good to see any competitor fail. I believe in abundance in that the more success every company has the better it is for the entire industry. I hope that they do come out of their difficulties as there will be hundreds of thousands of people left.

    I feel very grateful that the company I am with is posting record results up 30%

    Best of luck to Neways

    I will be watching with interest.

    Jeff

  31. Not good for the industry! Hopefully they can resurrect themselves somehow. Although I’ve not used their products in years, they are good. Hate to see the distributors left out in the cold if the worst happens. ViSalus found themselves in a similar situation a few years ago and are now growing like crazy after revamping their business model. There is still hope! I am however, glad to be a part of a company that has already been through that fire!

    Michael

  32. Dear Ted, as always, has fanned from anything a soap bubble. Has thrown nutrition for people who are glad on to gloat over. The scandalous theme involves readers more, and raises a rating of your site. We passed it in the first class. Neways has magnificent production and highly paid marketing the plan. Start of new production! Opening of the new markets! In November 2011 South Korea is opened, in April 2012 Will be Opening of Thailand, in 3 years ????????? China. About what that tells it to you?

  33. I really feel sorry for Neways distributors. This is going to happen with all product based MLM companies. Their main customers are their own distributors buying over priced products in a hope to make some residual income but they forget the basic defination of residual income. It simply means ” Do something once and get paid every month”. With any product based MLM company, you need to sell same products every month so make some money. That does not come any close to residual income. I am with a company which is in Essential services business. It is recession proof and people are going to pay their bills every month and you will get paid every month for doing something once. For more info, please visit my webstore.

  34. It’s seem like a shocker, surprise, and sad. However, if you look at the history of MLM in the last 50 years, isn’t it a norm for a company to go belly up? I think it happen everyday around the globe. Big leaders will definitely, know what to do when the time came. Wisdom for success still be with them. Little one, once again, sour and sore to MLM. What ever the case, everything will be fine, and everything will become history. If you have total believe in your company then continue doing what you are doing. If any of you kind of nervous about your company and are reading this, you should seek for advise and double check your company. Wishes you all the best and continue building this industry.

  35. I’m surprised network marketing companies seem to be hit by the recession. I always thought the industry as a whole was counter cyclical. Let’s hope this is an unique case on itself.

  36. It is surprising that such a well established company has cash flow problems but I would guess that financial re-structuring will take place as bankruptcy seems to be down-the-road a bit as an option, and a viable business will always find investors. However after 19 years in the MLM industry I am aware that times change with all businesses and being ahead of the curve is vital for survival. The good news for the Neway distributors affected is that their skills are transferrable if necessary, and will be in great demand with all the new entrants that will be entering our industry with all the economic turmoil out there.

  37. I worked at Neways for over a year. Getting to know the company and having a look at what was happening shows why Neways will be in bankruptcy court or some similar situation in the future. In hiring personal, Neways shops price and not getting the talent they need. I forecasted bankruptcy back in January of this year and was told by management I do not know what I was talking about. Their products are just ok, packaging very blah, and could stand for a drastic rework of the entire line, scrapping those that are marginal. IMO the place needs to have a major cleanup, bring in the talent and rework the entire product line. Best place to start is with the management team that got them to where they are today. Neways will probably be sold off, to one of the creditors who will try to revive the dead and eventually sold off to one of their competitors and combined with another company. As you are aware, Neways has been setup for this as the company is a mere shell corporation, as most of their assets were sold off and leased back to the business. Employees were told it was done for tax reasons … LOL! Just look at the last company Golden Gate has bankrupt. Anyway I wish the best to all Neways staff who are forced to ride this uncertainty into the new year. Another 30 days or so and everybody should know. GOOD LUCK EVERYBODY!

  38. Ted,
    Congratulations. You have once again attracted the worst of the worst distributors to comment on a post….vultures looking to find a wounded piece of MLM meat on which to feed. These comments disgust me. Multiple streams of stupidity is what it is.

    Neways is not going anywhere just like Arbonne didnt go anywhere but UP after reorganization. Yes it is a PR challenge but organizing ownership and debt is a good thing for Neways and will boost their profitability and ability to reinvest back in the field’s growth.

    Until we as professionals look to pull together to support each other vs feed off each other we as a profession will continue to struggle with integrity and credibility.

    1. Hi Richard,

      I report Direct Selling news, good or bad. I love the good news which covers about 99% of this website. I hope for Neways they can re-structure and will report again if that is the case.

  41. You have to love the company view on business is as usuall. When you are inside, here is business as usuall: layoffs, benefits being cut such as the 401K plan, employee benefit contribution increasing for less benefits each year, reviews/bonuses delayed, training to all IT employee’s cut and the IT department a revolving door, as you know that field is hot and hiring in most other companies. And the big laugh of all to save money is a holiday party catered into the wharehouse served on paper table clothes and folding tables. Now there is a sign that things are going bad. Now while at the holiday party you will see a partial wharehouse rented out for inside boat storage. Looks like sales are decreasing if you are renting out your wharehouse space for boat storage. I guess it is business as usuall, just as Neways says!

  42. You have to love Jennifer Wolber’s view on Neways, but the real truth is just as I posted, and nothing can be disputed or changed on how Neways operates within.

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