Oprah Loses $48M in One Day as Weight Watchers Stocks Drop 35%

WW what?

Weight Watchers is scrambling to clarify its new name, WW, and mission after a poorly executed rebranding campaign left consumers confused and membership numbers tanking.

The 55-year-old company started using the shorter name last year in an attempt to embrace wellness — a buzzy but vague term intended to promote a healthier lifestyle that would attract and retain customers long after they achieved their target weight.

The message fell flat with consumers. Weight Watchers is now forecasting a 10 percent drop in membership during the first quarter,the crucial diet season after the holidays that can make or break a diet companies' entire year, the company said in releasing its fourth-quarter earnings Tuesday.Shares plunged by roughly 35 percent Wednesday, erasing more than $48 million from Oprah Winfrey's stake in the weight loss company.

"It's gone from being a high flying growth company to being a beaten up kind of turnaround situation,"said Linda Bolton Weiser, an analyst at D.A. Davidson & Co.

Weight Watchers did not respond to requests for comment.

CEO Mindy Grossman told analysts Tuesday the company stands behind its strategy, blaming the results on a poorly executed marketing campaign.It's now turning to Winfrey to help turn things around.

"If I was going to assess what the [problem] was, it wasn't granular enough," Grossman told analysts on a call Tuesday. "I think it needed to be more weight loss-focused, especially in the January season, and a more aggressive bridge from Weight Watchers to WW it needs to be more overt."

Weight Watchers strayed too far from its core weight-loss mission too fast. Grossman assured analysts the company has already started massaging its message and will launch the new ad campaign with Winfrey this spring.

While Winfrey is a powerful asset, the company's reliance on her celebrity status also presents a risk.

"One of the bear criticisms for the stock is that Oprah is the whole reason for the company's success," Bolton Weiser said. "If they're now saying they're tying their whole advertising to her, doesn't that fuel worries about the day Oprah decides not to be involved?"

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