Leadership Hotline Message from Doug DeVosOctober 19, 2001 An Amazing Year

Quixtar/Partner Store Sales Up 57 Percent

Hello everyone, this is Doug DeVos with some great news for U.S. and Canadian Emeralds and above.

Many of you have been eagerly awaiting news of second year sales for the Quixtar opportunity. I'm thrilled to announce that your businesses, powered by Quixtar, generated an amazing US$816 million in sales through Quixtar and Partner Stores last year. This represents an increase of 57 percent over Quixtar's first year. And it's an incredible accomplishment, especially during a year that saw the demise of hundreds of e-commerce companies.

Specifically, you generated $751 million in sales at Quixtar, an impressive increase of 67 percent over our first year sales of $448 million. Now that's important, because our Partner Store sales dipped only 6 percent last year as a number of key Partner Stores closed their virtual doors during fiscal 2001.

But, best of all -- most importantly -- Independent Business Owners powered by Quixtar earned $230 million in bonuses and incentives last year. That's up 62 percent. There are so many metrics that companies track for e-commerce success, it could be page views, it could be hits, it could be unique visitors -- you name it, tons of things. But for us, the $230 million payout to you is a much better indicator of success, because when you succeed, we succeed.

Your efforts and success firmly cement Quixtar's place among leading e-commerce companies. Last year, the U.S. National Retail Federation ranked Quixtar 7th on its Stores magazine roster of consumer e-commerce companies and the Retail Council of Canada named Quixtar the second most successful consumer e-commerce site. We expect this year's results will catapult Quixtar even higher in future rankings.

Additionally, there's good news from Alticor, Quixtar's parent company, as well. Alticor this week announced worldwide sales increased nearly 7 percent up to $4.1 billion for the last fiscal year. That's an actual revenue number, not estimated retail sales like we used to use before. Estimated retail sales for fiscal 2001 would have been $5.4 billion, versus $5.1 billion in fiscal 2000. Going forward, Alticor is going to be using actual revenues going forward, so please don't misinterpret this as we change from estimated sales at retail to actual revenues. The actual revenue number was up 7 percent to $4.1 billion, so that continues to say this business is working well globally, as well as in the U.S. and Canada.

Congratulations on these outstanding results. Together, we've made Quixtar a standout in e-commerce, and together, we can and I would say we must keep the momentum going. Quixtar is among the leaders because we have what others envy -- an uncommon business model, a special business model, where you combine high touch with the Quixtar high-tech. Together, it's a powerful combination. Our thanks, from all of us at Quixtar to all of you, for your continued commitment to this business. We wish you the very best for continued success in the year ahead.