Oprah goes on a diet, gains Weight Watchers deal

Winfrey is taking an approximately 10 percent stake in Weight Watchers.
Winfrey is taking an approximately 10 percent stake in Weight Watchers. Greg Allen/Invision/AP, File

NEW YORK – Oprah Winfrey is going on a diet again, but this time she stands to gain a lot of money from her efforts.

Weight Watchers said Monday that it signed a five-year deal with the former talk show host. Winfrey, a co-owner of OWN: The Oprah Winfrey Network, is paying about $43.2 million for a 10 per cent stake in the weight loss company.

The deal is already paying off: Weight Watchers shares nearly doubled after the partnership was announced.

Winfrey will use the Weight Watchers mobile app and work with a personal coach, the company said. She has also agreed to let Weight Watchers use her name, image and likeness for its products and services. Additionally, she will make appearances on the company’s behalf.

Weight Watchers hopes that Winfrey’s star power will boost its brand. The deal is part of Weight Watchers’ plan to expand from being a weight loss company to “helping people lead a healthier, happier life,” said Weight Watchers President and CEO Jim Chambers in a statement.

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The company has been hurt by the rise of fitness trackers and apps, such as FitBit and MyFitnessPal, which lets users track steps, workouts and the amount of calories they eat for free. Weight Watchers charges for its online tools, and weekly meetings and weigh ins has been a hallmark of its plan. Its shares had been down 73 per cent for the year through Friday.

Winfrey’s weight was a frequent subject of her talk show, which ended five years ago after 25 years on the air. In 1988, a thin Winfrey famously walked out on stage wheeling 67 pounds of fat in a wagon, representing the weight she lost. But her weight has fluctuated over time. In an interview with Barbara Walters as the show came to end, she told the TV interviewer that one of her goals was to still “make peace with the whole weight thing.”

A stamp of approval from Winfrey during her talk show days has meant a lot. Books she recommended skyrocketed up the bestseller lists and products shown on her holiday gift guide episodes would sometimes sell out.

It might be harder to get her message across now, without her talk show. “She has less contact with people on a daily basis,” said Craig Garthwaite, an assistant professor of strategy at Northwestern’s Kellogg School of Management.

In 2012, for example, Winfrey relaunched her book club, but it doesn’t hold the same power. “Most people don’t know that it exists,” said Garthwaite.

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Winfrey is buying about 6.4 million shares of Weight Watchers at $6.79 per share. She will also receive options to buy an additional 5 per cent of the company’s fully diluted shares. She is also joining the company’s board.

Shares of Weight Watchers International Inc. soared $6, or 88 per cent, to $12.79 in midday trading Monday.

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