Omegatrend Financial Problems Sales Slump - Administrator/Receiver Appointed
Omegatrend brings in the administrators
3-May-06 by Mark Pownall
http://www.wabusinessnews.com.au/en-story.php?/1/38023/Omegatrend-brings-in-the-administratorsClaremont-based network marketing group Omegatrend has become one of those rare victims of a boom, appointing voluntary administrators after a slump in sales.
Cliff Rocke, Simon Read and Andrew Birch from PPB were appointed to the business yesterday after the directors became concerned about the sales issue.
The business employs 70 people and has 1000-1500 active members from a database of 13,000 across Australia, New Zealand and parts of Asia.
Omegatrend was a split off from Amway around two decades ago.
Mr Rocke said the business was struggling with sales slumping to $12-$15 million per annum because in boom times members were less inclined to supplement their incomes by selling Omegatrend products.Thousands hit as sales scheme fails
NEALE PRIORhttp://www.thewest.com.au/20060504/news/general/tw-news-general-home-sto134081.html
WA's answer to the American multi-level sales scheme Amway has collapsed, leaving the 13,000 recruits facing losses of reward points they earned through buying and peddling cleaning products and cosmetics.
The directors of Nedlands-based Omegatrend, which was founded in 1990 by Amway's former top Australian salesman and sales network specialist Loren Watts, called in administrators from insolvency accounting firm PPB this week in a bid to resuscitate its network.
The collapse comes a year after the group embarked on an aggressive international expansion. It started life in Mr Watts' former Perth home before becoming a national company with offices in Sydney and Perth, generating annual sales of more than $12 million.
Mr Watts, who remains a director of Omegatrend, is believed to have recruited many of Amway's top sales people when he set up Omegatrend and offered a similar range of cleaning products, cosmetics and hair care products under the Sanden Brook brand.
Mr Watts now runs the group's 13,000-strong network of sales representatives from Sydney while his long-standing business associate Lindsay Kenyon manages the group's activities from its Claremont headquarters.
Neither Mr Kenyon nor Mr Watts could be contacted yesterday.
Administrator Cliff Rocke said Omegatrend had suffered recently because people were able to find full-time work in booming economies and many were no longer motivated to try to earn money through activities such as trying to sell its products.
Only about 1000 people were actively selling for Omegatrend.
The sales people in the multi-level marketing system earned points by buying Omegatrend products, which they either used themselves or sold to others.
The points could then be used by members to either buy products or vouchers through Omegatrend.
Substantial profits were believed to have been made by people who established big networks of members under them, receiving commissions from sales and recruiting activities by people they had directly or indirectly introduced into the structure.
Mr Rocke said he did not believe any cash was owed to participants in the sales network, though they were owed reward points. He would find out the number in an investigation of the group's affairs.
He said the directors of Omegatrend were fully committed to preserving all members' rights and to fixing the group's financial problems.
Omegatrend owes its suppliers about $2 million.
