FOUNDER OF HERBALIFE WEIGHT-LOSS EMPIRE DEAD AT 44

Founder of weight-loss empire dead at 44

Associated Press, May 23, 2000 

'If they're such experts, then why are they fat?' he once said of U.S. federal regulators

Malibu, Calif. -- Mark Reynolds Hughes, multimillionaire founder of the Herbalife empire of weight-loss and nutritional products, has died aged 44.
Mr. Hughes was found dead on Sunday in his Malibu mansion, said Sergeant Norine Plett of the Los Angeles County Sheriff's Department.
He died of apparent natural causes but an autopsy will determine the exact cause of death, she said.
Los Angeles-based Herbalife, which Mr. Hughes founded in 1980, sells products in 48 countries, according to its Web site.
It said Mr. Hughes was inspired to found the company by the death of his mother from an accidental overdose of prescription diet pills when he was 18. In a message on the site, Mr. Hughes wrote: "I've dedicated my life to bringing the finest weight-loss, nutritional and personal-care products to everyone around the world."
But during the 1980s, Mr. Hughes battled the U.S. Food and Drug Administration and the California attorney-general's office over the way the company's products were marketed. Regulators contended the company was making medicinal claims. Medicines are regulated by the FDA, while nutritional supplements are not.
"If they're such experts, then why are they fat?" Mr. Hughes said in 1985 at a Senate hearing. "I've lost 16 pounds in the last few years."
Mr. Hughes reached settlements with the regulatory agencies in 1986 that involved paying $850,000 to settle California regulators' claims.
That same year, Mr. Hughes took his company public. But he announced plans last fall to buy it back and make it private. In April, he announced he was withdrawing his $510-million (U.S.) offer because of difficulties in arranging financing.
Herbalife's 1999 sales totalled $956.2-million.
Mr. Hughes made headlines last year with plans to build a 45,000-square-foot home on 157 acres above affluent Benedict Canyon, raising criticism of neighbourhood residents. Had it been built, it would have been bigger than the White House.


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Autopsy on Herbalife founder finds death caused by accidental overdose

CNN News, June 17, 2000 

LOS ANGELES (CNN) -- Mark Hughes, the founder of Herbalife International, one of the world's leading distributors of herbal products, died of an accidental overdose after mixing alcohol with a "toxic level" of antidepressants, authorities said Friday. 

Scott Carrier, of the Los Angeles County Coroner's Office, said final autopsy results found that Hughes, 44, had high levels of both alcohol and an antidepressant in his blood.
The cause of Hughes' death recalls that of his mother.
Hughes' mother died of an accidental overdose of prescription diet pills when he was 18. He often cited her death as motivating him to succeed in the herbal pruducts industry -- to provide millions with products that were not available to his mother.
Carrier attributed the death to "alcohol-Deoxpin intoxication." Doexpin is an antidepressant, which Hughes was taking to "treat insomnia," the coroner said.
Hughes' blood-alcohol level was recorded at .21 percent. A "toxic level" of Doexpin was also found in his system at 2.1 micrograms per milliliter, Carrier said.
Hughes was found dead in his Malibu mansion May 21.
The initial autopsy, conducted on May 23, was inconclusive and required additional tests.
In February 1980, Hughes founded Herbalife International. It has since become one of the world's largest distributors of herbal products, with sales of about $1.7 billion annually.

Herbalife Faces Struggle After Death of Founder Mark Hughes

Bloomberg News / August 11, 2000

Los Angeles, Aug. 11 (Bloomberg) -- Herbalife International Inc.'s Web site still uses a video of Mark Hughes hawking weight- loss pills and nutritional supplements two months after the company's founder died of a prescription drug overdose.
Focusing on the past is one way the 20-year-old company is coping with a future that no longer includes its charismatic leader. By the time of his death at 44, the 6-foot tall, 190-pound high school dropout had attracted one million distributors in 49 nations and generated $1.79 billion in annual sales.
After sales grew at a compound annual rate of 18 percent from 1996 to 1999, they were up just 7 percent in the first quarter. Since the Class B stock hit a 52-week high of 16 1/4 on Jan. 18, it has fallen 40 percent after Hughes' failed effort to bring Herbalife private in a leveraged buyout. The company's price-to- earnings ratio -- one measure of earnings optimism -- touched 16 in early 1998; it is now at six.
There are also new problems: Ephedrine, used in Herbalife weight loss pills, has been linked to cardiac arrests, strokes and Deaths by the Food and Drug Administration. The new chairman, identified as Mark Hughes' father, is accused of being an imposter. Hughes' assertion his mother died of an overdose of prescription diet pills is contradicted by her autopsy. And Hughes' own image of clean living has been tarnished by evidence he smoked cigars and died after a four-day drinking binge.
"It's very much a cult of personality," said David Stewart, professor of marketing at the Marshall School of Business at the University of Southern California. "When you begin to hear things that are inconsistent with the image, that can cause all kinds of problems." Still Pitching Herbalife
Hughes, who died May 21 in his $27 million Malibu mansion, had led hundreds of sales rallies -- resembling religious evangelical gatherings -- drawing people both to the products and the prospect of getting rich selling them. His pitches are still broadcast on Herbalife's Web site.
"Technology now provides an incredible avenue for me to spread my dream of global health and wealth!" says Hughes. A framed commemorative photograph of Hughes was recently offered to distributors who met certain sales milestones, "in dedication to Mark's dream."
But the herbal health entrepreneur, who began selling diet products from the trunk of his car in 1980, may not have led the life of health he had preached. Hughes smoked six to eight cigars a day and died after a four-day drinking binge, according to his autopsy. It found that he suffered an accidental overdose of alcohol and doxepin, an anti-depressant.
Chris Pair, 45, chief operating officer, was named president and chief executive to replace Hughes. Pair said he met Hughes 30 years ago while Pair worked at CEDU, the residential California drug abuse treatment program where Hughes was sent after a series of brushes with the law.
The company's 14 most successful distributors will now be leading major sales meetings. "They will be stepping into his shoes," said Pair in an interview at the company's annual shareholder meeting. "One person cannot do that, but a team of people, I think, can."
Hughes says he founded the company because his mother, Jo Ann, was 30 pounds overweight, which ultimately led to her death. "I lost her to an accidental overdose of diet pills. She was only 36 years old," says Hughes in the introduction to Herbalife's product catalogue. "That's why I've dedicated my life to finding a better way of helping people manage their weight."
Concern about the side effects of Herbalife weight loss products has grown, however, after the Food and Drug Administration attributed a 1998 cardiac arrest suffered by a 28- year-old woman to an Herbalife ephedrine product, Original Green.
Ephedrine, a chemical cousin of amphetamines that increases blood pressure and heart rate, has been linked by the FDA to hundreds of adverse reactions and dozens of deaths. On Aug. 8 and 9, the U.S. Public Health Service held public meetings in Washington about the safety of dietary supplements containing Ephedrine.
"It does not concern me, because no deaths have been linked to our product," said Pair. He said Herbalife's products comply with FDA regulations.
False Medical Claims
Herbalife, which a decade ago paid $850,000 to settle California charges that it made false medical claims about its products, doesn't say on its labels that some products contain ephedrine. Instead, it lists Ma Huang, the herb that contains the ephedrine.
The company has done no clinical studies to test the safety of those products, said Robert Sandler, general counsel. "Our ephedra product is a mild stimulant," he said. "It helps you withstand the pangs that sometimes happen when you are dieting."
That claim is challenged by Raymond Woosley, chairman of Georgetown University's pharmacology department, who recently studied 140 reports of adverse reactions to ephedrine products, including some sold by Herbalife, at the request of the FDA.
"There's absolutely no study that's ever shown ephedrine helps you withstand the pangs," he said. "There's a short-term weight loss that's not sustained." He said ephedrine is chemically "almost identical" to amphetamines, and has been conclusively linked to deaths, strokes and seizures.
Banned or Restricted
Six U.S. states including Florida and Texas ban or restrict sales of the products.
Herbalife's claim that Jo Ann Hartman was killed by diet pills is contradicted by her autopsy. It indicates she died of an overdose of Darvon, a narcotic. Although 5-foot-6-inches tall, she weighed just 105 pounds at death.
CEO Pair said he was unaware of that information. Sandler, the general counsel, said he'd never seen the autopsy. "Whether she in fact died of an overdose of diet pills is rather immaterial to the story of Herbalife," Sandler said. "It motivated him. It may have been a false belief in his mind, but he believed it."
The company is also facing controversy because of a dispute between two men who both claim to be Hughes' father.
Paternity Question
Mark's birth certificate lists his father as Stuard Hartman, who was married to Jo Ann until their divorce in 1970, when Mark was 14. The company insists that John Reynolds, who was briefly married to Jo Ann before she married Hartman, is his biological father.
Court documents show Mark and his brothers, Kirk and Guy, were the children of Stuard and Jo Ann's marriage. Kirk works for Herbalife and Guy is deceased. Hughes is Jo Ann's maiden name.
The issue has come to the forefront now because Reynolds, 66, was elected as a director and chairman of Herbalife's board, on June 27. Reynolds, who founded a plumbing supply business, wasn't previously a company employee. "I have friends and relatives calling me asking what's going on," said Hartman, a retired businessman. "It's very upsetting." He's offered to take a DNA test to prove he is Mark's biological father.

Herbalife Founder on Drinking Binge Before Death

Reuters / August 12, 2000

LOS ANGELES (Reuters) - Mark Hughes, founder of the weight loss and nutritional firm Herbalife International, had been on a four-day drinking binge just before his death in May, final autopsy results showed on Saturday.
Hughes, 44, was found dead in his bed in his Malibu home on May 21. He died from an overdose of alcohol and the    prescription anti-depressant Doxepin, the autopsy report said.
The autopsy was released by the Los Angeles County coroner's office on Saturday, and quoted sources close to Hughes saying he was drinking at a birthday party the night before his death and ''had been on a four-day drinking binge.''
``They did not know what alcohol (he) had been drinking,'' the report said, adding that Hughes' psychiatrist was aware of the drinking problem and had been treating him for it, prescribing Doxepin and an alcohol abuse drug.
Three months before his death Hughes had been treated for pneumonia. He also suffered from asthma and was being treated for a stomach problem, according to the report.
On the night of his death, Hughes fell asleep on a living room couch and later made his way to bed sometime after midnight. His wife, Darcy Hughes, called security guards in the morning when she could not wake him