Arbonne International

Arbonne International, LLC, known as Arbonne, is an international multi-level marketing company founded in 1980 in the United States by Norwegian entrepreneur Petter Mørck.[1] Its product lines include vegan skincare, cosmetics, and nutrition. The company had an estimated annual sales revenue of $544 million in 2017.[2] Arbonne's CEO is Jean-David Schwartz.[3] Lawsuits have been filed concerning discrimination.[4][5] In April 2020, Arbonne received a warning letter from the US Federal Trade Commission in response to illegal health claims related to the Coronavirus Disease 2019 (COVID-19) as well as false and misleading income claims made by Arbonne distributors. [6]

This article is about the cosmetics company. For the French village, see Arbonne.

Arbonne International
TypePrivate
IndustryMulti-level marketing
Founded1980 (1980)
HeadquartersIrvine, California, US
FounderPetter Mørck
ProductsCleansers, moisturizers, sunscreens, exfoliant, nutritional supplements
Areas ServedAustralia, Canada, New Zealand, Poland, United Kingdom, United States of America
Websitewww.arbonne.com/discover/

Arbonne is headquartered in Irvine, California, US, with international offices in Australia, Canada, New Zealand, Poland, and the United Kingdom.[7]

History

Founded in Orem, Utah, US by Mørck in 1980, Arbonne is named after a village in Switzerland, called Arbon. Mørck had worked in the Norwegian skincare industry from 1965. In 1975, feeling the ingredients used were harmful to the skin, he moved to Arbon, Switzerland and started working on his skincare line with Pierre Bottiglieri, an employee of Laboratoires Cosmetiques Arval. According to the history published by Arbonne, Bottiglieri and Mørck worked together to create a line of products using no petroleum or animal products. In another version of their history, Mørck purchased the formulations from Laboratoires Cosmetiques Arval, which sold formulations for rebranding.[1]

The first headquarters were located in Orem, Utah, moving to Irvine in 1984. Mørck was active in the company until his death in 2008. His son, Stian Mørck, is currently Brand Ambassador. Rita Davenport became the company's first President from 1991 to 2011. Arbonne became a subsidiary of Levlad, Inc., which became the main manufacturer of Arbonne products around 2004. In 2005, both companies were acquired by Harvest Partners, which dubbed the new acquisition Natural Products Group, LLC.[8] In February 2018, Groupe Rocher, Paris, agreed to acquire Arbonne International and Nature's Gate from Natural Products Group.[9]

The company made $200 million in sales in 2004. In 2005 there were 434,000 independent consultants, increasing to 612,000 in 2006. In 2006, Arbonne established distribution centers in Greenwood, Indiana,[10] and near Calgary, Alberta.[11] This was in addition to an existing distribution center in Mississauga, Ontario.[1] Between 2007 and 2009, the number of the company's consultants fell from 1.3 million to under 800,000.[1] In January 2010, Natural Products Group LLC filed for bankruptcy protection in order to reduce company debts.[12] Harvest Partners were no longer involved, with Arbonne's new ownership being a combination of banks and private equity firms.[13]

In 2006, Arbonne opened for business in Canada, then Australia in 2007, and the United Kingdom in 2008.[1] In 2014, the company launched Arbonne Poland, and then both New Zealand and Taiwan in 2016.[14]

In March 2018, Arbonne was acquired by Groupe Rocher.[15]

In January 2020, Arbonne announced its earned the B Corporation certificate. [16]

Products

Products are formulated at the Arbonne Institute of Research and Development (AIRD) in Switzerland and produced in the United States. A 2006 article in The Virginian-Pilot highlighted questions about whether AIRD not having their own facilities was proper and noted that chemist Pierre Bottiglieri might have worked for multiple companies besides Arbonne.[17] Bloomberg.com lists no address for the AIRD.[18]

Business Model

Arbonne is structured on a direct selling business model (also known as a Network Marketing]). The products are sold via home-based businesses owned and

Multi-level marketing tree diagram

operated by independent consultants.[19] Independent consultants are not employees and are viewed differently by the United States Internal Revenue Service.[20] Arbonne is a member of the Direct Selling Association.

In 2012, The Arbonne Charitable Foundation was registered as a charity to support programs to help teenagers build and increase their self-confidence.[21][22] The Foundation has charitable status within the U.S., Canada, Australia and the UK.[23]

Lawsuits

In November 2009, the U.S. District Court for the Southern District of Indiana ruled that Arbonne International LLC violated federal law. The company refused to employ Lisa Wilson on the grounds of her disability (deafness). Arbonne paid a US$30,000 settlement to Wilson and was required to institute non-discrimination policies and training.[4]

In May 2017, Cynthia and Michael Dagnall raised a lawsuit against Arbonne in the Orange County Superior Court. They alleged that the company was an illegal pyramid scheme.[24][25] The Arbonne Pyramid Scheme Class Action Lawsuit was dismissed on March 20, 2018.[5]

Recalls

In January 2009, Arbonne voluntarily recalled some production lots of branded peanut butter cups. This was due to the risk of possible Salmonella serotype Typhimurium contamination of peanut-based products consigned from a Georgia processing plant.[26]

In September 2009, Arbonne voluntarily recalled a production lot of branded foaming sea salt scrub, due to the risk of contamination with Pseudomonas aeruginosa bacteria.[27]

In January 2013, Health Canada advised of Arbonne's voluntary recall of one batch of branded facial moisturizer for men. Arbonne's testing found that the batch contained the bacterium Aerococcus viridans.[28]

In January 2014, the Australian Competition & Consumer Commission (ACCC) recalled sample tubes of branded day cream due to the presence of the bacterium Enterobacter gergoviae.[29]

In June 2016, Arbonne voluntarily recalled multiple lots of branded liquid eye liner. The products contained unacceptable levels of the bacteria Staphylococcus saprophyticus, Staphylococcus xylosus, and Staphylococcus lentus.[30]

In October 2017, the ACCC recalled one lot of branded body wash due to unacceptable levels of Staphylococcus cohnii.[31]

References
  1. "Arbonne International, LLC". Business Insights: Essentials. 2019. Retrieved January 3, 2020.
  2. "DSN Global 100 company profile of Arbonne". Direct Selling News. Retrieved September 5, 2019.
  3. "Arbonne International, LLC". Business Insights: Essentials. 2019. Retrieved January 3, 2020.
  4. "Arbonne International to Pay $30,000 To Settle EEOC Disability Discrimination Suit". www1.eeoc.gov. November 9, 2009. Retrieved May 25, 2018.
  5. "Arbonne Class Action Says Pyramid Scheme Scams Thousands of Victims". Top Class Actions. June 2, 2017. Retrieved January 12, 2020.
  6. https://www.consumer.ftc.gov/blog/2020/04/ftc-sends-covid-related-warnings-mlm-companies. Missing or empty |title= (help)
  7. "Arbonne Stretches to New Zealand | Orange County Business Journal". www.ocbj.com. Retrieved September 8, 2019.
  8. "Harvest partners forms Natural Products Group, LLC". Global Cosmetic Industry. 173: 7. February 1, 2005. Retrieved January 14, 2020 – via Gale OneFile: Business.
  9. "Groupe Rocher Enters Into A Definitive Agreement To Acquire Arbonne International". Canadian Government News. February 6, 2018. Retrieved January 5, 2020 – via Gale OneFile: News.
  10. Ketzenberger, John. "The Indianapolis Star John Ketzenberger column". July 13, 2006. Retrieved January 5, 2020 – via Gale OneFile: News.
  11. "Arbonne Canada Opens New Distribution Center in Calgary". Canadian Corporate News. July 3, 2008. Retrieved January 5, 2020 – via Gale OneFile: News.
  12. "Legal Notices". The Wall Street Journal. February 5, 2010. ProQuest 1941562059.
  13. Brown, Rachel (March 19, 2010). "Arbonne beyond bankruptcy". Women's Wear Daily. 199: 6 – via Gale General OneFile.
  14. "Arbonne International Expands into Asia with Opening of Arbonne Taiwan". India Retail News. November 1, 2016 – via Gale OneFile: News.
  15. LLC, Arbonne International. "Arbonne Announces New CEO Jean-David Schwartz". www.prnewswire.com. Retrieved March 5, 2020.
  16. LLC, Arbonne International. "Arbonne Earns B Corporation Certification To Kick Off 40th Anniversary Year". www.prnewswire.com. Retrieved April 17, 2020.
  17. Swift, Earl (June 21, 2006). "Behind the gift of Arbonne (story continued)". The Virginian-Pilot. Retrieved May 25, 2018.
  18. "Arbonne Institute of Research and Development LLC". Bloomberg.com. Retrieved January 11, 2020.
  19. Hornbeck, Leigh (January 23, 2019). "Capital Region women find fulfillment in gig economy". Times-Union. Retrieved January 15, 2020.
  20. Reh, F. John (October 29, 2019). "Some (US) Tax Implications of Being An Independent Consultant". The Balance. Retrieved January 15, 2020.
  21. "Arbonne International, LLC has created an official charitable...". Household & Personal Products Industry. 49 (6): 42. June 1, 2012. ISSN 0090-8878 – via Factiva.
  22. "Arbonne Forms Official Charitable Foundation". Health & Beauty Close-up. May 2, 2012 – via Gale OneFile Business.
  23. "Arbonne Charitable Foundation". Open990. December 13, 2019. Retrieved January 13, 2020.
  24. Reformado, Wadi (August 2, 2017). "Arbonne consultants allege company operates an illegal pyramid scheme". Legal Newsline. Retrieved January 12, 2020.
  25. "Superior Court of California County of Orange" (PDF). Courthousenews.com. May 25, 2017. Retrieved January 12, 2020.
  26. "Peanut product recall list still growing". UPI NewsTracker. February 17, 2009. Retrieved January 15, 2020.
  27. "Seasource-brand sea salt scrub is recalled". UPI NewsTrack. September 14, 2009. Retrieved January 15, 2020.
  28. "Arbonne Men's Facial Moisturizer Recalled Due to Contamination". Pharmaceutical Processing World. January 30, 2013. Retrieved January 15, 2020.
  29. "Arbonne Europe Sarl—RE9 Advanced Restorative Day Creme SPF 15 3mL Sample Tube". Product Safety Australia. January 14, 2014. Retrieved May 25, 2018.
  30. "Arbonne UK Ltd—Arbonne It's A Fine Line Liquid Eyeliner". Product Safety Australia. July 28, 2016. Retrieved May 25, 2018.
  31. "Arbonne UK Limited — Rescue & Renew Detox Body Wash". Product Safety Australia. October 10, 2017. Retrieved May 25, 2018.
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