International Heritage Converts To Direct Marketing Company
RALEIGH, N.C., Oct. 27 /PRNewswire/ -- INTERNATIONAL HERITAGE INCORPORATED (''IHI'' or the ''Company''), (OTC Bulletin Board: IHIN - news), today announced it is releasing its sales force from their contractual obligations to the Company and taking steps to convert to a direct marketing company.
IHI will eliminate the recruitment of new Independent Retail Sales Representatives (''Representatives'') from its marketing plan, terminate all network marketing functions and convert to a direct marketing company with its existing product lines consisting of fine jewelry, collectibles, sports equipment, telecommunications services and a proprietary line of skin care and nutritional products. The change in operations will allow IHI to continue servicing existing customers and seek new business through all forms of media including print, radio and television advertising. In moving toward the new marketing approach, IHI will reduce its number of employees and consolidate its offices.
IHI has realized phenomenal success with the launch of its proprietary line of consumable products and currently supplies these products to thousands of existing customers. In the last six months, the Company has fulfilled more than 60,000 product orders and is confident that it has sufficient inventory on hand to continue supporting existing and future orders as a direct marketing company. IHI also will consider introducing new product lines in an effort to improve net profits.
The losses associated with actions by the Securities and Exchange Commission (''SEC'') and the North Carolina Attorney General (''NCAG'') have caused the Company significant adversity, negative publicity and financial costs which have led to the deterioration in the Company's morale and ability to stay focused as a network marketing company. The Company has realized a loss of more than $85 million due to legal battles and is forced to make changes in its operations to limit those losses in the future.
Although IHI has had many victories in its recent legal battles, it was outside the courtroom that the Company was adversely affected. Stan Van Etten, President, Chief Executive Officer and Chairman of IHI, stated, ''It is unfortunate that this has happened to a successful company like IHI. In three years, the Company has realized remarkable achievements with more than $200 million in sales, more than 175,000 Representatives, and more than 200 employees. We have successfully changed the lives of hundreds of thousands of people and donated millions of dollars to communities, non-profit organizations, and places of worship. As a result of the devastating consequences caused by the actions of the SEC and the NCAG, we have chosen to modify our company, not to go out of business. The changes should create better long-term shareholder value and more opportunities for the Company.
Through the Direct Sellers Association, an international organization which includes most major network marketing companies, and other organizations, the Company has developed friendships with many successful companies in the industry who have been watching its situation and are interested in acquiring its dedicated sales organization. The Board of Directors for IHI has waived the restrictions placed upon its Representatives which would limit or impede them from contracting with other network marketing companies in order to preserve the spirit, culture and earnings opportunity for its Representatives. Based on IHI's history, corporate culture, management, products and compensation plan, the Company believes its Representatives will continue to have economic success with another network marketing company.
Mr. Van Etten plans to stay with IHI and lead the Company through the changes associated with becoming a direct marketing company and work diligently to take care of his responsibilities as President. This will include resolving all outstanding litigation, eliminating all aspects of a network marketing business, and rapidly developing new business so vendors and shareholders can continue to realize a successful relationship with IHI. The Company will file an 8-K with more details in approximately one week.
Statements that are not historical facts contained in this Release including management's estimates regarding sales, anticipated operational profits and other similar financial information in the second six months of 1998 are forward-looking statements under the provisions of the private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. The Company wishes to caution readers that several important factors could affect the Company's actual results, which could differ dramatically from those expressed in any forward-looking statements made by or on behalf of the Company. Further information regarding the important factors that could cause actual results to differ from projected results can be found in the Company's reports filed with the Securities and Exchange Commission.
SOURCE: International Heritage, Inc. |
