Los Angeles Business Journal

JustFab’s Chief Named in FTC Action

By Tom Dotan Originally published January 8, 2014 at 1:25 p.m., updated January 8, 2014 at 4:11 p.m.

When the Federal Trade Commission announced late last year that it was going to crack down on deceptive weight loss campaigns, the assumption was that Herbalife Inc. would be the most likely local company to be singled out.

But the embattled downtown L.A. multilevel marketer went unmentioned when the FTC announced its enforcement action yesterday. Not so lucky was El Segundo’s Sensa Products, seller of a powder that customers sprinkle on their food, which it advertised would make them feel full faster.

The FTC said these claims lacked competent scientific evidence, and the company has settled a complaint it brought for $46.5 million. The agency assessed that Sensa is only able to pay $26.5 million of that total, and suspended the payment of the $20 million balance.

A statement from the company acknowledged the settlement, but emphasized that the government made no claims against the safety of the product.

“We continue to receive positive feedback from our customers and remain committed to developing products that help our number one priority – our customers – live healthier, happier lives,” Sensa Chief Executive

Kristin Chadwick said in the statement.

Among the people singled out in the FTC’s announcement is Adam Goldenberg, the co-founder of Sensa’s holding company, Intelligent Beauty. He, along with Sensa’s developer, Dr. Alan Hirsch, are barred from making any future weight loss claims for their products without verified scientific backing.

Sensa was one of three companies created under Intelligent Beauty, which Goldenberg co-founded with Don Ressler. The other two companies are Dermstore, a online beauty retailer, and JustFab, a subscription e-commerce site for fashion.

While he retains an ownership stake, Goldenberg has stepped away from day-to-day duties with Sensa. After Dermstore was acquired by Target last year, Intelligent Beauty spun off JustFab into its own company and recast itself as Sensa Inc. Goldenberg is JustFab’s chief executive, and has said he views the e-commerce site as his primary focus.

JustFab expanded significantly last year, including buying its chief competitor, Santa Monica’s ShoeDazzle Inc.

The FTC’s judgment does not name JustFab, nor is it expected to affect the company’s sales, which Goldenberg said could crack $400 million this year. But it’s worth noting that JustFab has been the subject of past complaints of deceptive practices.

JustFab operates a service that for a $39.95 monthly subscription sends members a pair of shoes, or other apparel. Some customers have complained that the site deliberately makes it unclear how to purchase a pair of shoes without signing up for the recurring fee.

Goldenberg’s representative did not return requests for comment.