Betterware, which sells household items via a catalogue sent to millions of homes, has gone into administration following its sister company Kleeneze. Betterware employed directly 90 people and thousands of door-to-door selling roles.
Betterware said that difficult trading conditions and cashflow problems had been responsible for its demise.
The firm started in 1928 when it was founded in east London as a door-to-door seller of brushes and polishes. The catalogue was launched in the 1970s and in 2015 the business was bought by JRJR, a Texas-based consumer sales group.
The company relies on thousands of self-employed agents who distribute the catalogue around the country. Many of them have other forms of income to supplement their earnings.
Begbies Traynor, the company’s administrator, said that Betterware had ceased trading, with all staff made redundant. “Our aim was, of course, to find a purchaser for the business as a going concern in order to safeguard the jobs, but unfortunately this did not prove possible,” it said.
Any parties interested in acquiring assets of the company has been asked to contact the joint administrators Gareth Rusling and Claire Dowson of Begbies Traynor as soon as possible.
No details have been given to those who may have ordered goods but have a look at our page on “will I get my goods!”
This is what one of the regional managers sent to us to put her side of the story
Read on please to see where the actual Trading Difficulties emerged from!
One Head Office plus warehouse and less than 100 salaried staff including drivers. None of those employees actually contributed to the income of the business.
Betterware has 14 Sales Divisions all over the UK including Northern Ireland and indeed The Republic of Ireland. So 14 Sales Leaders all self employed and in effect running their own company.
Around 100 Regional Sales Executives all self employed, operating within the Divisions, in effect running their own business.
Many 100's of Area Coordinators all self employed, operating Areas within the Regions, in effect running their own business
4 to 5,000 Distributors all self employed with their own exclusive patch within the areas, in effect running their own business
Around 100 to 200 Territorial Sales Agents all self employed with their own Territory (Same size as Coordinator but no Distributors under them) in effect running their own business.
Fantastic set up FREE to Join, in fact everything essential to run their business FREE throughout.
It was only the Distributors and TSA's plus some Coordinators that put the books out etc,
Those above had admin and recruitment plus support duties at Region and Divisional level.
Coordinators recruited and supported as well in fact some only performed that role in their areas.
It worked well it had done for years, a structured Sales Force.
In 2015 JRJR under a different name CVSL from TEXAS bought out Betterware, the year after Kleeneze.
Things seemed OK until latter part of 2017 and early 2018. The MD for Kleeneze became MD of Betterware as well. Buying Department of Betterware was in effect closed and people laid off, with all buying done from Kleeneze Head Office.
The problems started with high levels of 'Out of Stock' items, levels that Betterware had never ever encountered before, this included the Christmas Book and to some extent The Sale Book, the following catalogue and indeed last catalogue was tailored to match actual held stock and that worked great, sales were up.
However although Betterware regained a Buying Team of their own again, they through no fault of their own had lost their line of credit. This meant money paid in by the Distributors each week was having to fund not only Head Office expenditure, but to finance upfront payments for goods.
Everyone was pulling together but the HMRC bill was a bridge to far.
If JRJR had not got involved with Betterware then this would not have happened.
You see it was not just the UK companies of Kleeneze or Betterware that ceased trading, as back in February 2018 a company called My Secret Kitchen UK closed down. They were also under the JRJR Banner, in fact if you research JRJR they are in trouble for not filing returns in USA.
Who else is suffering? the 7,000,000 Betterware customers, many elderly or housebound with out IT knowledge or equipment. For the elderly the visit of their Betterware Distributor was a highlight as they were one of the few visitors they got.
What this truly needs is someone to give CPR to Betterware and galvanise the mighty self employed workforce to get out there and do what they do best.
I hope someone reading this does just that. None of this was the fault of anyone that was exclusively with Betterware in any guise at this time.
Betterware in business for 90 years, destroyed in 3 years by JRJR.
It might mean starting again but the structure in place can be ready if a positive move is made.
The company had a £22 million turnover in the pre JRJR days
Ex Regional Sales Executive
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Please note that the guide was mostly written pre Covid-19 and there have been some changes to insolvency legislation that limits creditors actions and relaxes rules regarding wrongful trading. A new 20 day moratorium for distressed businesses has also been introduced.