ADA, Mich., Jan 31, 2007 /PRNewswire via COMTEX/ -- Alticor Inc. and its family of companies reported sales of $6.3 billion for the 2006 performance year, which ended December 31.
Sales declined slightly from $6.4 billion in 2005. Company officials attributed the dip to a period of regulatory uncertainty that chilled sales in China, the company's largest direct selling market. However, Amway (China) Co. Ltd. received its direct selling license December 1, 2006, leaving company officials optimistic that China sales will return to growth this year.
The company still exceeded its sales forecast for the year. Alticor Chairman Steve Van Andel said: "After six straight years of growth, we expected we might be down this year because of the China situation, and we planned for that. We are still very pleased with these results, because there was very strong growth in several of our mature markets as well as in our newest ones."
Said President Doug DeVos: "No one works harder than the people who sell our products around the world. We thank all of them for their efforts, which helped us beat targets in a challenging year."
He added: "Going forward, we have placed new emphasis on innovation throughout the company. We expect that will result in better products, new approaches, and increased appeal to consumers in our markets around the world."
Alticor operates primarily through Amway Corp., a global leader in direct selling; Quixtar Inc., a North American Web-based business opportunity; and Access Business Group LLC, a product development, manufacturing and logistics provider to Amway, Quixtar and other companies. Alticor employs more than 13,000 worldwide, and enables more than 3 million people to own their own businesses. Alticor is also the parent of Alticor Corporate Enterprises, a new company that manages Alticor's non-direct selling holdings such as Amway Hotels Corp., Gurwitch Products, and Fulton Innovation.
Amway, a global leader in the $102 billion direct selling industry, saw 45 of 55 affiliate markets post sales increases this year. Noteworthy increases were registered in Europe, where sales rose more than 40 percent, led by new markets Russia and Ukraine.
More than 70 percent of the company's sales come from Asia. Strong performers in 2006 included the Philippines, Malaysia, Thailand and Singapore. Korea sales increased by 4 percent, while Japan sales declined.
Sales for Amway (China) Co. Ltd. (ACCL) declined 23 percent from 2005, but China continues to be Amway's largest individual market with more than 180,000 active sales representatives and more than 180 retail shops and service centers.
Said Van Andel: "We lowered our sales targets in China last year, knowing that our sales force would be distracted until our license was granted. The resolution of the China issue gives us great optimism, and we expect ACCL to continue to lead the direct selling marketplace in China."
Latin America had an overall solid performance, with especially strong sales this year in Mexico, Honduras, Guatemala, El Salvador and Puerto Rico.
Said DeVos: "We set out a couple of years ago to concentrate our efforts on improving the performance of our existing markets, and we're now seeing the fruits of those efforts," said DeVos. "As a result, more customers throughout the world are discovering the great products and services we provide."
In North America, Quixtar, established in 1999, introduced new products and reported its fourth straight year of sales surpassing the billion-dollar mark.
This year, Quixtar rolled out its first national advertising campaigns. The "Land of Will" television and "It's Been Another Good Day" print campaigns appeared last fall in the U.S. and Canadian media on numerous venues including NBC's Sunday Night Football. National print ads for Nutrilite brand nutritional supplements appeared in Newsweek in the U.S., and Macleans in Canada.
"Quixtar continues to adapt to the changing marketplace online," said Van Andel. "They have honed their skills at online marketing, streamlined the web site based on user feedback, and maintained impeccable standards for order accuracy and customer satisfaction."
The Quixtar business has also benefited from increased product visibility and third party endorsements. The unit's SA8 with Bioquest detergent was named by a leading consumer magazine as tops for high-efficiency washers, for the first time. Asafa Powell, the world record holder in the 100 meters, signed with Nutrilite as a sponsor through the 2008 Olympic Games. And Quixtar again ranked as the number one online retailer in Health & Beauty sales by Internet Retailer, and 20th overall among e-commerce sites.
Access Business Group
Access Business Group enjoyed an outstanding year in 2006. Access Business Group led Amway and Quixtar to several new product launches this year: expanding Atmosphere air treatment systems into seven additional markets, redeveloping the core Double X nutritional supplement, launching the Artistry Dramage 14 skin care system in China, and developed a children's DHA supplement called Brainiums, available in the United States and Korea.
Al Koop, chief operating officer for Access Business Group, said: "Since we became a company six years ago, we've invested heavily in our people, our processes and equipment. This is paying dividends, as we have more capacity to work with and expertise to offer our customers. The gains we've made prepare us to support some great new ideas in our core business."
This year, Access Business Group received two international awards from the Supply Chain Council: Operational Excellence and Global Award for Supply Chain Excellence. The first speaks to overall attainment of operational efficiency, and the second to organizational improvement.
Its third-party product development, manufacturing and logistics sales for the year totaled $138 million in revenues, an increase of more than 12 percent from 2005. These sales are in addition to products and services sold to sister companies Amway and Quixtar.
Alticor Corporate Enterprises
This year, Alticor announced a new holding company for its non-direct selling companies, called Alticor Corporate Enterprises (ACE). The new company is parent to two new members of the Alticor family of companies as well as Amway Hotels Corp.
"We expect these companies and investments to bring a steady flow of consumer insights and innovations to Alticor," said ACE Chief Operating Officer Bill Payne. "ACE brings us closer to the marketplace and that will be a benefit to Amway and Quixtar as well."
In July 2006, Alticor announced the acquisition of Gurwitch Products, a luxury cosmetics and skin care company which develops and markets cosmetics under the brand name Laura Mercier(R), from The Neiman Marcus Group. Gurwitch allows Alticor access to powerful marketing, research and development talent in the premium beauty industry. Alticor expects to invest in its Artistry brand of cosmetics and skin care products with the insights gained from this relationship.
In December 2006, Alticor also announced a new technology venture that enables power to join the intelligent wireless revolution. Fulton Innovation LLC has been created to license and market exciting new technologies such as eCoupled(TM), which enables electronic devices like cell phones to be charged wirelessly.
In August 2006, Alticor also increased its majority stake in Interleukin Genetics, which develops innovative nutrition and health products including the Quixtar-marketed Gensona line of consumer genetic tests and accompanying nutritional supplements.
The construction of the 340-room JW Marriott Grand Rapids hotel in downtown Grand Rapids remains on schedule for its fall 2007 opening. Construction of the world-class hotel tower recently reached its final height of 24 floors, and the glass-encased structure is now fully enclosed. The Amway Grand Plaza Hotel has completed renovation of its 28th floor Cygnus restaurant and maintained top rankings for its accommodations and restaurants.
A year of increased visibility
In addition to Quixtar's advertising and sponsorship activities, Alticor launched an advertising campaign in Michigan in response to political ads criticizing the company by opponents of former Alticor president and Michigan gubernatorial candidate Dick DeVos. The "I Am Amway" ads featured employees talking about the company and were well received in the marketplace.
Pro basketball fans around the world who follow the NBA's Orlando Magic are now greeted by the Amway name. The Florida team's home arena in December was renamed Amway Arena following Alticor's purchase of naming rights. The team is owned by Amway co-founder Rich DeVos.
Alticor's "One by One Campaign for Children" is now in its fourth year of operation, and continues to develop programs and services that improve the lives of children worldwide. Since its inception, Amway, Quixtar and Alticor employees have volunteered more than 545,000 hours, and more than $37 million has been spent globally on a wide range of initiatives benefiting more than 5 million children.
Alticor ( www.alticor.com) is the parent company of Amway Corp., Quixtar Inc., Access Business Group LLC, and Alticor Corporate Enterprises. Headquartered in Ada, Michigan, USA, Alticor and its affiliates offer products, business opportunities, and product development, manufacturing and logistics services in more than 80 countries and territories worldwide. In its most recent performance year, the company reported worldwide sales of $6.3 billion. For further information, please contact Alticor's media information line at 616.787.7565 or e-mail Alticor's media relations staff at [email protected].