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Herbalife Announces $400M Investment for Digital Platform Upgrade

Downtown-based Herbalife Nutrition Ltd. has announced a $400 million investment in a new digital platform for both its product distributors and customers, its largest-ever investment in internal operations.

The platform, called Herbalife One, will include enhancements to make processes more user-friendly and efficient for new distributor sign-ups, onboarding and training, wellness content, shopping tools and community coaching and support tools, among other uses.

For company executives, the new platform, announced on Aug. 2, will offer more deep data analytics and insights, making it easier to track sales trends and the performance of its millions of distributors.

“Designed to supercharge distributor growth and elevate customer experiences around the globe, Herbalife One will be our first-ever unified data and AI-powered global digital platform, enabling growth by delivering a best-in-class digital experience around the world,” Herbalife Chief Executive John Agwunobi told analysts during the company’s quarterly earnings conference call that same day as the announcement.

“From re-imagining sign-ups, e-commerce, downline management to providing seamless payment options and other innovative capabilities to drive ongoing engagement, satisfaction and loyalty, Herbalife One will help differentiate and strengthen our leadership in the market,” Agwunobi said. “We will build Herbalife One on a brand-new architecture that will allow for scalability, flexibility, performance and speed to market of future capabilities, laying the foundation for our future success.”

The rollout of the digital platform is expected to take two to three years, with the $400 million total investment being spread out over that time frame, Agwunobi told analysts.
The announcement of the platform came at a crucial time for Herbalife, which has a distributor network of at least 2.5 million selling a range of nutrition products in an array of flavors in 95 countries and territories.

Earlier this year, Herbalife said that distributors who had come on board during the pandemic had not been meeting expectations. The company also had to pull out of both the Russia and Ukraine markets after Russia’s late February invasion of Ukraine. And the company is still struggling to grow sales in China as it grapples with ongoing pandemic closures.

All this translated into first quarter revenue and net income that fell 11% and 33% respectively from the first quarter of last year. That in turn prompted a continuation of a stock selloff that saw Herbalife shares fall nearly 50% in value between February and late June.

But the digital initiative, along with somewhat better second-quarter earnings results led to a 13% rally in Herbalife’s share price on Aug. 3, closing at $27.50, its highest level since March.

Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.
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