Dynamic Essentails, Natures Bounty

DYNAMIC ESSENTIALS DEMISE

Royal Tongan Limu Juice To Disappear!

18 July 2003 -- Several months ago I raised the question, would DEI survive if their parent company Natures Bounty (a large nutritional manufacturer) bought Rexall Showcase/Unicity?? It turns out that DEI just died because of Natures Bounty's purchase of Rexall Sundowne (manufacturing and distribution) plus a few other things. Your Editor was close! Add in the Sea Silver hit!

The Sea Silver vs FTC case scared Natures Bounty! Natures Bounty has been busted by the FTC for health claims on one of their health supplements. Rexall Sundowne, now owned by Natures Bounty, also has a FTC consent degree against them for improper claims. Your editor remembers some years ago that Natures Bounty was cited by the DEA for improper record keeping in the distribution of ephedrine hydrochloride. Also like just about every nutritional manufacturer in the U.S., they have been entangled in ephedra lawsuits. Natures Bounty is under a lot of spotlights and none of the spotlights are friendly!

Why should that matter? Because Natures Bounty wants to buy the GNC chain Royal Numico is dumping. That is going to take big millions of borrowed money and the last thing in the world Natures Bounty can stand is a "hit" like Sea Silver. For the last two months DEI had been "Sterilizing" distributor websites (which caused some distributors to quit) for improper claims. Evidently Natures Bounty did not trust the searches and control of printed material. So Natures Bounty "killed" $25 million a year DEI dead in it's tracks. They pulled back the CEO from a launch meeting in Mexico to shut the company down. Suprise! Asinine - Natures Bounty could have just sold the company for $100,000 or something.

Gary Raiser the ex-CEO and Kevin Jones are now putting together a replacement company. Claims were made on conference calls this date that it would be done in 14 to 30 days. Your editor doubts the time frame, but wishes them well in a speedy recovery.

In the early 90's, like many industry analysts, I thought that MLM ownership by a publicly traded company was good. Disclosure, standards, and control would be better. With the debacles of the last 5 years that theory is out the window as far as distributors welfare is concerned.

I feel for every distributor in the company. I opened up my monthly check envelope from Slick 50 to find a goodbye letter. Printed across the top of the six digit check was LAST COMMISSION CHECK BY ENDORSING YOU ACCEPT TERMINATION. Slick 50 had gone straight retail, a quick cut to the throat. Not a good feeling. Same here, may the fleas of a 1000 camels infect the armpits of Natures Bounty Executives. Also I am predicting the bad Karma generated (along with the fleas) will cause the GNC/Rexall deal to fail and kill the price of Natures Bounty stock and make them a pink sheet trash stock.

Your Ed. Rod Cook