“I believe in the program so much I decided to invest in the company and partner in its evolution,” the talkshow host turned billionaire businesswoman said on Monday as she announced the deal, which includes personal endorsements and a seat for her on the company’s board, reports The Guardian.
Investors appeared to have faith in Winfrey, who has been dubbed “Queen of All Media” and built up a $3bn (£1.9bn) business empire. Shares in Weight Watchers more than doubled after the news broke. The share price spiked from the $6.79 she paid on Friday night to as high as $15.09 on Monday, with shares ending the day up 105 per cent to $13.92. That makes Winfrey a paper profit of $45.6m.
“Weight Watchers has given me the tools to begin to make the lasting shift that I and so many of us who are struggling with weight have longed for,” she said in a statement.
Winfrey has long shared her battle with weight loss with her millions of fans, and once wheeled a red wagon filled with 30kg (67lb) of fat on to her talkshow to reveal just how much weight she had lost. A thyroid problem had led Winfrey’s weight to balloon to 90kg (14st 4lbs) in 2008.
“With all the other things that I know how to do and all the other things that I’m so great at and all the other accomplishments, I can’t believe I’m still talking about weight,” she said in an interview for her magazine, O, five years ago. “For me it is not a cosmetic issue. It is an emotional issue. When my engine runs down, my drug of choice is food.”
Weight Watchers, founded by Jean Nidetch in her Brooklyn kitchen 52 years ago, has struggled to maintain its relevance as the weight loss market has dramatically shifted to weight tracking and exercise apps such as Fitbit, and other online services, most of which are free. Weight Watchers subscriptions start at $20 a month, and membership has been falling fast.
Jim Chambers, Weight Watchers chief executive, said: “Through our conversations, it became clear that there is a tremendous alignment between Oprah’s intention and our mission. We believe that her remarkable ability to connect and inspire people to realize their full potential is uniquely complementary to our powerful community, extraordinary coaches and proven approach.”
Winfrey has the option to buy a further 5 per cent of the company, but she is prevented from selling any shares for two years to show that she has faith in the long-term prospects for the company.
Before the deal was announced, the company’s share price had collapsed by 72 per cent so far this year and sales had fallen by more than 20 per cent in both its first two quarters. In 2011, Weight Watchers shares were changing hands at $85 each.
RJ Hottovy, an analyst at Morningstar, said Winfrey’s involvement could help the company connect with a new generation of weight watchers. “It brings an unprecedented level of commitment for a Weight Watchers celebrity endorsement,” he said. “It potentially expands their audience and opens up some intriguing marketing opportunities as well.”
Weight Watchers, which is trying to expand its role to help people lead “healthier, happier lives” rather than just concentrate on weight loss, had previously tried to tap celebrity appeal by signing up singers Jessica Simpson and Jennifer Hudson and former NBA star Charles Barkley. Sarah Ferguson was a Weight Watchers ambassador from 1997 to 2008.
As part of a rebranding exercise earlier this year, the company said it was ditching celebs in order to focus on the lives of real people with a new TV campaigning called “My Butt”. The commercial was described by Weight Watchers ad agency as “a montage of one personal life [that] just happens to be filmed through the lens of her butt”.
At the time, the company’s North America boss, Lesya Lysyj, said: “A celebrity-only strategy is not something we’ll do in the future. From this point on, that’s not a major part of our story.”
Nidetch, and the other Weight Watcher founders, became a multimillionaires when the company floated in 1968, and even richer a decade later when it was sold to Heinz for $71.2m.
It is now 51 per cent owned by a Luxembourg-registered private equity company called Artal Group. It is run by secretive billionaire and Weight Watchers chairman Raymond Debbane from offices on Lexington Avenue. He reportedly owns a $7.5m, 7,500-square-foot house in Greenwich, Connecticut, and a $6m Manhattan apartment.
Nidetech, who wrote in her 2009 autobiography “I’m not a millionaire anymore”, retired to a one-bedroom apartment in a retirement community near Fort Lauderdale, where she died earlier this year aged 91.
In her book, she said she was motivated to found Weight Watchers when she ran into a neighbour at the supermarket who said: “Oh, Jean, you look so good! When are you due?”
Nidetch wasn’t pregnant. But she did weigh 214lb and had a 44-inch waist and an addiction to Mallomars, chocolate-coated marshmallow cookies, which she hid in the bathroom hamper and gorged on every night.
“We ourselves hold the instrument that makes us fat,” she said in an interview with the Sun Sentinel in 2011, brandishing a fork. “I just shake my head when I see someone eating cake and saying, ‘Oh, I wish I wasn’t heavy.’ But they keep eating the cake!”
