Oprah Winfrey buys 10% stake in Weight Watchers International
With her investment in Weight Watcher International Oprah Winfrey caused the companies stock prices to double in just one day. Oprah Winfrey has announced she will buy a 10 percent stake in Weight Watchers International Inc. By adding her celebrity and consumer appeal to a diet brand Weight Watchers is now banking on huge returns.
Winfrey’s $43.2 million nearly investment doubled Weight Watchers’ sagging share price, with more than 57 million shares changing hands on U.S. exchanges, this was by far the busiest trading day in the company’s history.
Weight Watchers has suffered in the last few years from an apparent shift in what U.S. consumers consider to be healthy. Shoppers increasingly have been moving toward natural foods and away from diet products in recent years. Winfrey has been very frank about her personal struggles with weight loss over the course of her career. This alone may help revive the brand some, but analysts said her influence with young people was uncertain.
The former talk-show queen will join Weight Watchers’ board and work to broaden the company’s reach by participating in its weight-loss program herself. She will document her experience and appear in Weight Watchers marketing, following previous endorsements by singers Jennifer Hudson and Jessica Simpson. You can bet that this will be a huge marketing campaign for Weight Watchers.
“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,” Winfrey said.
Winfrey, 61, was regarded as America’s most influential celebrity for years thanks to her daily talk show, magazine, book club and production company Harpo.
Her influence has slipped since she ended ‘The Oprah Winfrey Show’ in 2011 after 25 years to launch the Oprah Winfrey Network (OWN) on cable TV. However, she remains one of the richest and most powerful celebrities in the United States. Forbes magazine has estimated her net worth at $3 billion.
The media star will receive options to buy another 5 percent of Weight Watchers per her contract.
Winfrey’s endorsement will likely resonate with female consumers over the age of 50, Morningstar analyst R.J. Hottovy said in a research note. However, it is unclear how Weight Watchers will bolster its brand positioning with a younger audience, he said.