Nu Skin's Growth Could Stall Under Chinese Scandal
Nu Skin Enterprises has 40,000 salespeople peddling weight-loss kits and skin cleansers in China. Sales on the mainland had been chugging along in recent years, reaching 30 percent of the Provo (Utah) company’s $2.16 billion in revenue for the first nine months of 2013. That growth is now threatened by the allegation in the People’s Daily on Jan. 15 that Nu Skin is operating a “suspected illegal pyramid scheme.” A day later, China’s State Administration for Industry and Commerce said it would launch a probe into the company’s operations. Nu Skin’s shares tumbled 38 percent in two days. “We are absolutely not a pyramid scheme,” says Chief Executive Officer M. Truman Hunt. “Nobody gets rich in our world by recruiting others and selling them on nothing but the income opportunity.”
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