Lots has been going on at Mary Kay over the last couples of weeks. It’s time to review and drop some new (but exciting!) information about Mary Kay. (Scroll to the bottom for the new information.)
1. False income claims continue at all levels of the sales force. Sales directors and NSDs should know better, but they still lie about how much women make. From the “50% profit” lie to lies about the “average earnings” of various levels in MK.
Here is sales director Rachel Ryan lying about a new consultant “making half” of what she sold:
2. Mary Kay is in the process of shutting down distributions centers around the country and will be finished with the process by July. The closed distribution centers will include California, New Jersey, and Chicago. 200+ jobs are being eliminated as a result.
3. Restructuring is in process at headquarters. Sean Key (VP of Sales Development) and his Field Support Team were eliminated. Additional changes and job eliminations at corporate are rumored to be coming, but the details are under wraps.
4. Mary Kay abruptly shut down the markets in Australia and New Zealand. No word on whether other markets are on the chopping block.
5. All career conference locations have been canceled. The excuse is coronavirus. I’m sure the poor attendance played a part too.
1. All employee bonuses have been eliminated. In the past, employees received a “performance bonus” and profit sharing. It appears both of these will not be paid. The stated reason is the fact that global sales have been flat for several years. The markets in China and Latin America have been propping up sales (since markets like the U.S. have been in decline for a decade), but the foreign markets are now declining too.
2. In the May/June timeframe, Mary Kay Cosmetics will be announcing a change to the executive structure. A new upper level executive is moving to the United States permanently from overseas. No word on which C-level executive is being replaced by this person.
3. Mary Kay eliminated its entire Risk Management Department about a year and a half ago. The company’s Chief Supply Chain Officer was terminated amid allegations of fraud. Add the recent changes in the area of sales development, and you are getting the picture that the company is in financial distress. MK is still profitable, but far less than before.
It seems Richard Rogers and company see the writing on the wall about the MLM model. It’s no longer so easy to recruit and frontload inventory. Getting new recruits to buy inventory packages of $600 to $3600 is literally the lifeblood of the company. And those numbers are falling. Fewer recruits, and more importantly fewer (and smaller) initial inventory purchases as consultants realize this makes no economic sense for them.
I’m looking forward to see how this unfolds!