Amway Evolves Into Alticor

May 22, 2002
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ADA — When a company is known around the world, every strategic move it makes draws attention. When it’s a locally based company, the focus is magnified here at home.

So when Amway Corporation’s restructuring gave rise to Alticor Inc. last October, the direct-selling giant’s new business model was of special interest to the Grand Rapids community: big company, big move, big splash. Its evolution into Alticor was a natural as one of the top 10 finalists for Business Journal 2001 Newsmaker of the Year award.

The then 41-year-old Amway became one of four divisions under the Alticor umbrella, along with Quixtar Corp., the company’s Web-based direct sales business launched in September 1999, and two new companies, Access Business Group Inc. and Pyxis Innovations Inc. Though all four are inter-related businesses, each has a distinct identity.

Quixtar continues to sell Amway and other products online, and Amway is still the same Amway of direct sales fame. The company’s overseas operations are part of the Amway unit and continue to bear the original name.

Access Business Group manufactures, warehouses and distributes products for both Alticor and non-Alticor companies. Pyxis Innovations is geared to developing new products, services, businesses and partnerships to grow Alticor. Although Amway and Quixtar remain Access’s primary clients, Access also provides those services to companies outside the Alticor family.

Alticor remains focused on core Amway products and services in the nutrition, wellness, beauty and home products markets, and the company expects to build on those competencies under the redesigned structure.

Dick DeVos and Steve Van Andel, eldest sons of Amway cofounders Rich DeVos and Jay Van Andel, took over as Alticor’s president and chairman, respectively, as they were previously at Amway. Doug DeVos was named COO of both the Amway and Quixtar subsidiaries, and Al Koop was appointed as COO of Access Business Group.

Dave Van Andel, who was originally COO of Pyxis Innovations, resigned from the company in mid-February to start his own business. William Payne, formerly Alticor chief of staff, has since been appointed to head Pyxis.

Although there was some speculation in the business community that getting the Amway house in order through restructuring might make it easier for the company to go public — or possibly go on the market — at some later time, corporate spokespersons said that was not a factor in the company’s redesign.

The company’s redesign eliminated roughly 1,300 jobs worldwide, with about 70 percent of the cuts occurring in West Michigan. Access employs 3,600 people and Pyxis 50, most of whom worked for Amway corporate before restructuring, according to the company.

When Amway officials announced the restructuring initiative some 10 months ago, the move was expected to increase efficiencies and trim operating costs by more than $300 million annually.

Dick DeVos said at the time that the effort was more than a cost-cutting maneuver. It was a way to help the company adapt to the new, Internet-driven economy and take advantage of the new opportunities it presented.

“We are re-creating a new organization for the wired world — a world where the nature of business changes daily,” DeVos said. He said the company’s redesign would help it compete on several fronts and be more responsive in a fast-paced global marketplace.

A lot has changed for the Ada-based company since last fall, according to Mark Bain, Alticor’s vice president of corporate communications. There is a new optimism and esprit de corps around the company, as well as improved focus and profitability organization-wide.

“We’re roughly done with six months of our year so far and year-to-date sales are up nicely versus the previous year,” Bain said.

Profits are up even more, he said, adding that the company is seeing the benefits of restructuring earlier than anticipated. The division of the company into parts also seems to have given everyone sharper focus.

“Access has some new contracts and is working on more,” Bain remarked. “They are able to go out and serve new customers and existing customers perhaps more effectively than they have before. They’re on track to grow their business as we predicted this year.

“Pyxis has a number of things they’ve identified and brought to an advanced stage. I think it will only be a short matter of time before they are ready to come to market with some of those things.”

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