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.