THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, November 12, 1994 TAG: 9411120167
SECTION: BUSINESS PAGE: D01 EDITION: FINAL
SOURCE: BY LYNN WALTZ, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 86 lines
Pat Robertson's empire has sold its financially troubled KaloVita vitamin and cosmetics company to a Dallas company.
Royal BodyCare Inc. said Tuesday in Dallas that it had bought KaloVita and will close the personal-products company's Virginia Beach offices, idling about 20 employees, and continue to operate a warehouse for East Coast distribution. The purchase price was not disclosed.
KaloVita had been plagued by IRS probes, investigations by two state attorney generals and allegations of unethical practices involving alleged mingling of money between KaloVita and Robertson's nonprofit subsidiaries.
The move will solve many of the problems that have plagued the Virginia Beach offshoot of Robertson's intricate business conglomerate, said Royal BodyCare executive vice president Bob Phillips.
Phillips said that the IRS investigation will not follow the company to Dallas and that one state investigation has been dropped, promising that the troubled company will emerge strong and healthy under the Dallas firm.
KaloVita will continue as a separate line of products under the umbrella of Royal BodyCare, a firm with more than 185 beauty products. It is best known for True Aloe, an aloe vera drink, and for studies on the use of thigh cream to control cellulite.
The move will double the revenues of the Dallas firm and expand distribution capability from a western regional base to the East Coast, while increasing operating overhead only slightly, Phillips said.
``We believe we're taking two pretty successful companies and blending them to gain synergism,'' Phillips said. ``Rather than twice as strong, it will be three or four times as strong.''
The move will affect only about 20 employees in Virginia Beach, Phillips said. Most of KaloVita's other employees will stay on as the local warehouse is converted into an East Coast distribution center for Royal BodyCare. Some will transfer to the Dallas headquarters. Administrative headquarters on Columbus Street in Virginia Beach will be closed and the office furniture and supplies sold at auction next Thursday.
KaloVita and Robertson spokespeople were out of town Friday and were unable to comment.
Both companies are remarkably similar, Phillips said, from the strong central leadership of conservative founders to the product line.
Besides the health care products company, Robertson has founded the Christian Broadcasting Network, the Family Channel and Regent University Graduate School.
Royal BodyCare's founder, Clinton Howard, is a self-made millionaire in his mid-60s who pioneered medical laboratory service systems and built a network of 40 labs.
In 1981, Howard built a research laboratory that successfully isolated the active compound in aloe vera and continues to do research on the use of the compound in the treatment of cancer and various infections.
Royal BodyCare, Howard's latest venture founded in 1991, continues to rely on Howard's earlier work on aloe vera. One of KaloVita's drawing cards was the similar way in which the companies were structured. Both have relied on a sales force that works from home and buys the product from the company and resells it to customers.
``Their distributors are not typical,'' Phillips said about KaloVita. ``They believe in the concepts and principals of Pat Robertson. They're kind of zealots and we like that and we like the professionalism.''
Thursday night in Houston, the company held the first of three meetings with KaloVita distributors from throughout the country. The reaction was enthusiastic, though concerned about the changes, Phillips said.
KaloVita's East Coast operation will combine with Royal BodyCare's which has distribution centers in Dallas, Oregon, Canada, Australia, New Zealand and Mexico, and expansion ongoing in Indonesia and England. ILLUSTRATION: Color photo
Pat Robertson has also founded Regent University Graduate School,
the Christian Broadcasting Network and the Family Channel.
AUCTION
When: Thursday
Time: 10 a.m.
Where: 4701 Columbus St., Virginia Beach
Office supplies from a 60-person administrative center will be
auctioned to the highest bidders. Supplies include desks, chairs,
filing cabinets, printers, computers, etc.
by CNB