Business

Inside Herbalife

Fitness enthusiasts exercise at a Torrance gym operated by Herbalife distributors January 29, 2013.

Fitness enthusiasts exercise at a Torrance gym operated by Herbalife distributors January 29, 2013.  (Mark Boster / Los Angeles Times)

Share

Herbalife Ltd., the Los Angeles-based maker of nutritional and weight-loss supplements, has been at the center of a Wall Street grudge match, with hedge fund manager Bill Ackman betting it will fail and billionaire investor Carl Icahn saying it won’t. Ackman, who took a $1 billion short against Herbalife shares in December, said the company is a fraudulent pyramid scheme in which most of its distributors make no money. Herbalife -- and Icahn -- deny the allegations, saying the company’s business model is sound, and legal. Founded in 1980, Herbalife sells its products through a team of independent distributors in more than 80 countries. These distributors make money from their own sales as well as for those made by distributors they recruit.

Herbalife plant

Visitors to Herbalife Ltd.’s manufacturing facility in Lake Forest are greeted by a multi-media promotion of the company, including a video pitch by chief executive Michael Johnson.   (Mark Boster / Los Angeles Times)

Distribution center

Orders are filled at an Herbalife distribution center in Carson, California January 24, 2013. Products are shipped from this facility to distributors throughout the United States and in many countries worldwide.  (Mark Boster / Los Angeles Times)

Quality control lab

Herbalife employees test the quality of the company’s nutritional and weight-loss products at a lab in Torrance January 24, 2013.  (Mark Boster / Los Angeles Times)

Herbalife

A worker handles a container of Herbalife’s most popular product, Formula 1 meal replacement shake mix, at the company’s manufacturing facility in Lake Forest January 24, 2013.  (Mark Boster / Los Angeles Times)

Pick-up window

Distributors pick up Herbalife weight-loss and nutrition products at the front counter of a distribution center in Carson, California January 24, 2013.  (Mark Boster / Los Angeles Times)

Placing orders

Distributors use touch screens to place orders at an Herbalife distribution center in Carson, California January 24, 2013.  (Mark Boster / Los Angeles Times)

Herbalife club

Vincent Davis, 20, prepares a beverage for a customer at an Herbalife nutrition club in Long Beach. Patrons visit the club for nutrition and weight-loss products. There are hundreds of clubs like this in the United States, operated by independent distributors.   (Rick Loomis / Los Angeles Times)

Herbalife nutrition drinks

Herbalife drink products sit on the counter at a private nutrition club in Long Beach.  (Rick Loomis / Los Angeles Times)

Herbalife consumers

Angel Perez runs an Herbalife nutrition club in Inglewood, California January 29, 2013. Herbalife estimates Latinos account for about 60% of its U.S. sales made through its network of independent distributors, including Perez.  (Mark Boster / Los Angeles Times)

Herbalife

Customer Elizabeth Sandoval (right) gives her Herbalife distributor Angel M. Perez (left) a little hug after grabbing her morning cup of tea at Perez’s Herbalife nutrition club in Inglewood, California January 29, 2013. Herbalife estimates Latinos account for about 60% of its U.S. sales made through its network of independent distributors.  (Mark Boster / Los Angeles Times)

Herbalife Chairman and CEO

Michael O. Johnson, Chairman and CEO of Herblife Ltd. at his office in Los Angeles.  (Irfan Khan / Los Angeles Times)

Business

More From the Los Angeles Times