Los Angeles Business Journal

Herbalife to Expand in North Carolina

By Deborah Crowe Thursday, December 20, 2012

Herbalife Ltd., which has long relied on contract manufacturers to make its weight loss and nutritional products, has taken additional steps to change that.

The Los Angeles company, which began increasing its own manufacturing capability in 2009, on Wednesday said it has acquired and will retrofit a manufacturing and distribution facility in Winston Salem, N.C.

The former Dell computer plant, for which Herbalife paid $22.2 million cash, is expected to create 500 jobs in the city and become Herbalife’s largest company-owned manufacturing plant. The company received several grants and other incentives from the state of North Carolina to locate there, according to local news reports. Herbalife, which owns a manufacturing plant in Lake Forest and a raw materials processing facility in China, plans to spend $100 million to retrofit the North Carolina facility, where it will make nutritional powders and liquids for both North American and foreign markets.

The company’s stock on Thursday closed down nearly 10 percent to $33.70, after falling 11 percent on Wednesday. The price was dragged down by news that a hedge fund trader has been shorting Herbalife stock because he considers the company’s multilevel marketing business model an unsustainable “pyramid scheme.” The company’s chief executive, Michael Johnson, dismissed the accusations as market manipulation.