One thing that won’t be getting any slimmer following
As soon as the news broke Monday that Winfrey had bought 10 percent of the weight loss giant’s stock, shares doubled in value, then climbed another 30 percent in midday trading Tuesday.
“Oprah brings honesty, people trust her,” advertising expert and founder of Los Angeles-based The Brand Identity Center, Chad Kawalec, told TheWrap. “This is like Weight Watchers winning the lottery.”
While Weight Watchers has previously tapped celebrity spokeswomen including Duchess of York Sarah Ferguson, Academy Award winner Jennifer Hudson and singer-turned-fashion-tycoon, Jessica Simpson, Winfrey’s multi-million dollar investment is what makes this particular partnership extra sweet.
“Oprah is very wise about her investments,” chairman and founder of 15 Minutes Public Relations, Howard Bragman, told TheWrap. “Everyone knows she can wave her magic wand and make stocks go up. She does it sparingly and she only does it where she can truly make a difference.”
That’s a big part of why the 61-year-old billionaire decided to team with Weight Watchers.
“Over the years she has been asked to partner on a number of ideas and has always turned down those opportunities until now,” a spokesperson for Winfrey told TheWrap. “What made Weight Watchers different is that the mission of the brand is in perfect alignment with her own ideas. She was compelled by its proven weight loss program and new plans to expand into overall health and wellness.”
While it’s unclear if the media mogul will front Weight Watchers commercials like Ferguson, Hudson and Simpson, the company is already cashing in thanks to Winfrey’s star power. Before the announcement, Weight Watchers sales were down 22 percent, and profits were off nearly 50 percent in the first half of this year.
Just 24 hours after the deal was announced, the company’s stock prices soared, from nearly $7 to more than $14. Winfrey’s $43 million investment — in the form of 6.4 million shares — is now worth a cool $70 million. Not bad for a day’s work.
“The deal will not be seen as fleeting or temporary because Oprah bought into the company,” said Kawalec, who worked on Nutrisystem’s ad campaign for three years in the mid ’90s. “It’s essentially putting Weight Watchers at the tippy-top of Oprah’s Favorite Things.”
The fact that Winfrey has been very open about her own struggles with weight, adds to her credibility.
“This is an incredibly authentic alliance,” said Bragman. “Oprah is all about transformation and this fits perfectly with Oprah’s brand. If Weight Watchers can latch on to the broader aspects of the meaning of transformation, they can become a bigger, more powerful, and valuable company.”
The company seems to think that’s the way to go.
“We are expanding our purpose from focusing on weight loss alone to more broadly helping people live a healthier, happier life,” Weight Watchers President and CEO Jim Chambers said in a statement on Monday.
Based on the impact of Winfrey’s previous endorsements, Weight Watchers should brace for a financial windfall.
Oprah’s Favorite Things routinely flew off shelves after they were featured on her daytime juggernaut “The
Experts believe she could also turn Weight Watchers into a winner.
“If she succeeds in helping to change the company, it’s going to be one of the biggest success stories of all time,” said Kawalec. “If I were Nutrisystem or Jenny Craig, I’d be very worried right now.”