Scentsy did it in the last couple years when it launched two new “sister companies” under its Scentsy Family: Velata – which is a chocolate fondue collection (sounds like a new, creative use for a warmer), and Grace Adele, which markets fashion handbags and accessories. (For more information on the Scentsy family, Click Here.)
On March 15th, Longaberger signed a deal with Dallas-based CVSL Corporation – a company that is led by John Rochon, a former chairman of Mary Kay Inc. and a general partner of a group that at one time was the largest shareholder in Avon Products.
According to an article in The Columbus Dispatch on April 29, 2013, CVSL will be scooping up an entire portfolio of direct sales companies. (Click here to see the entire article.)
It has plans to add direct sales businesses that combined, total $7 Billion in annual revenue.
So what does this mean for home party or social selling consultants?
Cash flow is often the biggest challenge for home party businesses – especially when they start growing rapidly. As part of a company that is well-funded, it should be able to support stronger growth.
Certainly there are many other factors to consider, such as products, pricing, compensation plans, etc., but having cash resources is a big deal.
It also gives companies an opportunity to use resources more effectively.
Think about it for a minute. Home party or direct sales companies typically print new catalogs three or four times per year. One possibility is for a family of companies of this magnitude to have a dedicated printing company.
Just another idea (thinking outside the box – not based on any info from CVSL) – a family of companies of this magnitude could produce its own mediums – television, magazines, streaming TV, and much more.
Per the article in The Columbus Dispatch, Longaberger’s sales had decreased from $1 Billion at its peak in 2000, to right around $100 Million in 2012. It also has gone through several rounds of layoffs of company employees.
What do you think this will mean for Longaberger’s future?
It stressed that Longaberger will remain in Ohio, and will continue to be managed by Tami Longaberger and her team.
As quoted in the article: “Independent management of the brand was key to the Longaberger deal and will be key to future deals with other direct-marketing firms, Rochon said.”
It will be interesting to see what additional companies will join forces under CVSL’s umbrella!