Extendible Brushes and Brothers at War

19 Apr 2018

As the news broke last week that Kleeneze and Betterware had gone into administration, it took me straight back to the time a few decades ago when my big brother and I each worked for the other company, going house to house in our neighbourhood distributing catalogues, collecting orders, and then delivering them. It was pretty tense between us at the time, until we finally agreed to work on separate patches. I’m pretty sure I beat him on orders, but he would disagree.

Both companies have been much loved home shopping brands for a number of years. Accrington-based Kleeneze is one of Britian’s oldest catalogue companies founded in 1923, whilst sister company, Birmingham-based Betterware, was founded in 1928.

Betterware had come a long way from its roots selling brushes and polishes door to door. At the time, this sort of trade was commonplace in the United States, but pioneering over here in the UK and the company was an instant success.

The US was about to feature again in Betterware’s history, after a Dallas-based company, CVSL (who later became known as JRJR Networks), acquired the company in 2015 – the same company that had bought out Kleeneze in the previous March. At the time, Betterware’s reported revenue was around £23 million with a total sales network of 13,000 people, 5,000 distributors and 5 million orders per year.

Despite many attempts at reviving the brand, including bringing back some of its best loved and most popular products from years gone by, Betterware has suffered over the past nine months from poor trading conditions. They also cited increased competition online as another reason why they closed their doors (and stopped knocking on other people’s) for the last time on Friday 13th April.

Kleeneze too started showing troubling signs following a major restructure in 2017, but this was not the first time the company had faced struggles. Kleeneze had been associated with Christmas hamper firm, Firepak, which collapsed in 2006. By 2016, Kleeneze had reported losses of £3.3 million on a turnover of £21 million.

In 2017, as part of the restructure, the company moved to a new distribution centre in Manchester. The relocation hoped to cut overheads by bringing together the company’s logistics and distribution operations, but it ended up being the final nail in its coffin.

According to statements made by the company’s administrators, the business suffered from operational issues after Kleeneze’s relocation. Plus, there were logistical challenges and IT issues that took months to resolve. By this time, there were significant lost sales and cashflow problems, which just proved to be just too much, and Kleeneze could not come back from it.

Companies with similar models will no doubt sit up and take notice of this news. For example, Avon, also operating via a network of self-employed distributors, has been reporting hard times in recent times. The fourth quarter of 2017 saw no significant share earnings on the year prior which have remained relatively flat since 2015. In fact, Avon’s revenue and profits have been declining for at least the past decade. In an attempt to revitalise the brand, Avon has appointed a new CEO, but there is clearly a lot of work to do.

Further reading

DMH Stallard heads to the Olympics in support of St Catherine’s Hospice!

Blog, News & PR
Our staff are at it again! We're raising money for St Catherine's Hospice by walking, running, cycling and everything in between to cover 13,262km in 16 weeks
Read more Read

DMH Stallard advises Optiva Securities as broker to Tirupati Graphite in £10 million equity fundraising

News & PR
Nick Williams advised Optiva Securities Limited on its role as broker in arranging an oversubscribed £10 million placing for Tirupati Graphite plc
Read more Read

New Debt Respite Scheme provides “breathing space” to some debtors

Blog, Legal Updates
New Regulations require individuals with problem debt to seek advice from a dedicated adviser in order to apply for a moratorium
Read more Read

Keep the cash flowing

Recent stats suggest cash flow has all but dried up for many businesses; Kelly Mills reflects on the multi-faceted management that might help
Read more Read
  • Brighton Office

    1 Jubilee Street


    East Sussex

    BN1 1GE

  • Gatwick Office

    Griffin House

    135 High Street


    West Sussex

    RH10 1DQ

  • Guildford Office

    Wonersh House

    The Guildway

    Old Portsmouth Road



    GU3 1LR

  • Horsham Office

    Ridgeland House

    15 Carfax


    West Sussex

    RH12 1DY

  • London Office

    6 New Street Square

    New Fetter Lane


    EC4A 3BF

  • Get in touch