Guest Post by Greg Boudonck
Once a major multi level marketing force all throughout Europe, in today’s post I am going to provide a complete review of European Home Retail. Just mentioning the name may make some people feel heavy emotions including anger, sadness and more. I am not enjoying bringing back those emotions for people, but there are many lessons that can be learned from the demise of what once was a European giant.
I am using a variety of resources to try to make heads and tails as to why this multi level marketing giant toppled. If you have more information you think would help us understand the demise of European Home Retail, feel free to share them in the comments area below.
Neither the owner and operator of Online MLM Community nor I were ever involved with European Home Retail or any of its subsidiaries, so I am just going by the information I can find. Feel free in correcting me if you find I have any errors.
The History of European Home Retail
The name did not start as European Home Retail. It actually started as Farepak Hampers, which started in 1935. As the name suggests, the business made primarily clothes hampers, but Farepak delved into other products. In the late 1960’s, Farepak began operating a small Christmas Club. People would deposit small amounts of money each pay period, and when Christmas was near, they could use the funds to purchase Farepak products to give as gifts.
This system was a great way for people to have the needed gifts for Christmas, and many were involved.
In the mid 1990’s, Farepak bought an older MLM homecare business called Kleeneze. Creating a subsidiary called Farepak Food and Gifts Ltd, the Kleeneze operations were put under it. This is when European Home Retail came in. In 2006, the Kleeneze name was changed to European Home Retail.
The Christmas Club system was still in operation via Farepak and European Home Retail, but late in 2006, something seemed amiss. Farepak suddenly went into what is known in Europe as Administration. This is similar to bankruptcy in the United States. Thousands of people had put money into the Farepak coffers for their 2006 Christmas. People all across Europe were angry.
Later on that same day, European Home Retail, which was now considered the parent company of Farepak, also went into Administration. It was a domino effect. And the last dominoes were the people who had put money into the system and would not get it out for the Christmas of 2006.
There was a 5 hour protest outside the Farepak offices by those who were victimized on October 17, 2006. Threats of retribution were made against company officials.
The Farepak Excuse
Farepak blamed the situation on their parent company: European Home Retail. They said that they loaned the Christmas funds to European Home Retail, and were never paid back. Here lies what I would call a crime against humanity. The money that people were depositing should have been held in separate trust accounts.
I mentioned the domino effect earlier, and another company found itself in dire straits because of the situation. The main delivery system used of the items was Amtrak Express Parcels which also had to go into Administration.
Help From Others
Would the children of the people effected by the Farepak and European Home Retail situation not have a Christmas? Many companies and celebrities began creating donations to help the victims.
Farepak began liquidating everything in 2007. Two of the directors had charges brought against them, but the charges were dropped with a statement that they did everything they could to try and mend the problem.
The European Home Retail Sell Off
As the parent company of Farepak, Kleeneze and others, EHR began selling. Farepak was no more, but Kleeneze was sold to Findel Plc. Kleeneze is still an operating multi level marketing company. You can visit their website here.
Other subsidiaries of European Home Retail were:
EeZee TV Video
So What Can We Learn?
The number one lesson in this whole fiasco is that multi level marketing companies, and any businesses that hold people’s money should always keep that money in separate accounts.
I often have thought of our own Social Security Administration. Maybe they also need to take the lesson from Farepak and European Home Retail…But, that is a whole different political topic.
As a consumer, client or prospect, before handing your money over to any system such as this, make sure it is in writing that they will hold your money separate from the business capital.
This whole affair was essentially terrible business practices. We can learn a lot from this on how to handle our own business, and personal finances.
What are your thoughts about the Farepak and European Home Retail situation? Were you involved in any way? Did you lose Christmas funds? We would like to hear from those people who had an investment in this situation. Please tell us how you managed Christmas that year, and if you ever was paid back in any way.
You can post all comments and questions below.
I am also putting several reference links so you can read further. Thank you for visiting, and have a great day.
About the Author
Greg Boudonck is a freelance writer and the author of over 50 books. He writes on many different topics, but business subjects are one of his primary areas of writing expertise. You can see more about Greg and his work by visiting his website at Lancerlife.com.