Herbalife weight management products retail sales up 21% to $1.04 bil. in 1997.

HERBALIFE WEIGHT MANAGEMENT PRODUCTS RETAIL SALES UP 20.9% TO $1.04 BIL. in 1997, representing the company's largest business segment at 69.5% of total retail sales, the network marketer announced Feb. 19. In the fourth quarter, weight management category retail revenues increased 29% to $293 mil. The category includes the Thermogenics herbal weight control line, the protein replacement powder Formula 1 and herbal, vitamin and mineral supplements.

Retail sales of nutritionals increased 32.2% to $220 mil. for the full year, accounting for 14.8% of Herbalife's overall business in 1997. Quarterly nutritional retail sales were up 37% to $64 mil. Personal care product retail sales were the fastest growing segment of Herbalife's business, jumping 43.6% to $167.9 mil. in 1997. Herbalife is slated to launch 40 new product introductions in 1998 and plans to be "very active" in the nutritionals and personal care segments, the company said.

Consolidated Herbalife retail sales increased 24.2% to $1.49 bil. in 1997. Less a $708.2 mil. distributor allowance, net sales were up 23.8% to $782.5 mil. for the year. Net income rose 22% to $54.7 mil. In the fourth quarter, retail sales climbed 27% to $422.8 mil. and net sales increased 26.1% to $220.4 mil. The company posted a 7% gain in net income to $14.8 mil. in the three months.

On a regional basis, retail sales in the Americas were flat at $394.1 mil. in 1997. In the fourth quarter, retail sales in the region increased 18.3% to $103.9 mil. Retail sales in the U.S. "continued its resurgence" with a 14% increase to $74.8 mil., Herbalife said. Mexico and Canada reported strong performances in the three months, reporting retail sales increases of 58% and 30%, respectively. Retail sales in Brazil climbed 10% to $15.8 mil.

In the Asia/Pacific Rim, Herbalife posted its largest regional increase in 1997, with retail sales jumping 69.9% to $643.4 mil. In the fourth quarter, sales in the Asia/Pacific Rim shot up 41.2% to $194.9 mil. Japan "continued to establish new high levels," Herbalife said, with retail sales up 43% to $162.1 mil. Another "rapid" sales generator in the quarter was Herbalife's Hong Kong business, which posted a 68% retail sales increase to $6.8 mil. The company's unit in Taiwan had flat retail sales of $11.5 mil.

Herbalife European retail sales climbed 5% to $453.1 mil. in 1997. For the three months, the company's retail sales in the region increased 15.9% to $124 mil., spurred by sales growth in 16 of the 20 European countries in which Herbalife operates, the company said.

Areas of notable development include Italy, which reported a 14% increase in retail sales to $17.4 mil., and Austria, Norway and Switzerland, which as a unit "rose measurably" during the three months, accounting for 41%, or $7 mil., of the region's increase over the fourth quarter of 1996. Russia, the company's largest retail sales generator in Europe, reported flat sales of $39.8 mil.

The company is implementing a series of steps to "revitalize sales" in European markets, including France, Germany, Italy and Spain, which "experienced an initial period of growth followed by a leveling of or decline in sales," Herbalife says in a recent secondary public offering filed with the Securities & Exchange Commission. To move toward this goal, the firm said it has created regional planning and strategy groups with senior distribution members, increased its focus on governmental relations and brought in additional distributor support reps. In certain markets, Herbalife also has opened new sales centers.

In terms of new market expansion, Herbalife plans to move into Turkey and Indonesia in 1998 and is considering China, India, Colombia and Ecuador as potential new market candidates. The company bases its decision to enter new markets on whether it is able to "ensure that adequate distributor support services...are in place to support the growth," Herbalife states in the SEC filing. The firm commenced distributor operations in Thailand and Chile in 1997. Herbalife is selling 6.8 mil. shares in the offering and expects to raise $137.1 mil.