Samuel
Sat, Dec-31-05, 07:45
http://www.nytimes.com/2005/12/31/business/31interview.html
Confidence in One Diet Above All
By KEN JAWOROWSKI
Published: December 31, 2005
Linda Huett walked into a Weight Watchers meeting in the early 1980's, hoping to lose weight after the birth of her third child. It worked, and then some: she soon took a job at the company, was promoted to manager and later to a vice president. In 2000, Ms. Huett was named chief executive.
Given Wall Street's predilection for business-school-bred leaders, such a success story is a bit unusual. But investors appear to have faith in the company, which has posted a profit in every quarter since going public in 2001: even as Atkins Nutritionals filed for bankruptcy this summer, shares of Weight Watchers rose more than 20 percent in 2005. Customers evidently have confidence in the company as well - each week, about 1.5 million people attend one of its 46,000 meetings in 30 countries, making it the world's largest operator of weight-loss centers and giving it annual revenue of more than $1 billion.
Ms. Huett spoke recently about the company. Following are excerpts from that conversation:
Q. Do you still go to meetings?
A. Absolutely. I just went to a meeting a couple of weeks ago. I try to go as often as I can. It is what we're about. We are a brand - we're only a brand - our service and our philosophy. So if you think of us more as a group education than as just a diet, you'd probably understand why our meetings are so important.
Q. How do you manage a company that is so spread out?
A. You don't manage an infrastructure that big. What you do is hope that you have very, very talented people who are actually managing the infrastructure on your behalf. We are, though, a very flat organization. We're very close to the ground. I'm very close to our customer. So we really rely on a lot of talented layers between me and what happens in each one of those 46,000 meetings. But what happens in each of those 46,000 meetings is what really makes this company thrive and has kept us in business all these years.
Q. Is the low-carb dieting craze over?
A. I called it a sort of tidal wave at the time. It was really unprecedented how big it came, how fast it came. And then I think, as a tidal wave, it washed its way through and we've come out the other side.
People are looking for solutions and I fully understand that. And because we're more sane, sensible, steady, balanced - it's maybe not as sexy as the latest sort of miracle, if you like. But in a sense we are the place that people ultimately end up, where they want to do something long term. I think that a low-carb regime, like any other regime that's asking you to do something quite extreme, they just are unsustainable. And our research has shown us that for decades.
Q. What percentage of your clients are women?
A. The vast majority. If I'm looking at it worldwide it's about 95 percent. If I'm looking at the U.S. it's probably about 91 percent.
Q. Does the company have any programs aimed at men? That seems like an underserved market.
A. We've done a lot of research in the last few years and we do have programs under development. I don't imagine that we're going to have a meaningful offering until probably the start of 2007.
I think doctors now are much more proactive in talking to their patients and challenging their patients if they do have a weight issue. And I think that this has really woken men up to the fact that this isn't just a vanity issue.
Q. Why should an investor buy your stock?
A. If you look at our track record, for the past six years you can see incredibly strong growth. You'll know that we have a diversified source of that growth in licensing, which has been growing by leaps and bounds. We're doing it very cautiously and carefully. But our brand is that powerful. We have the products that we sell directly to the consumer and we are doing that, obviously, in our meetings, and we have other proprietary distribution methods like our Web site.
We have huge markets to go into. If you're looking at Asia, if you're looking at some of the developing countries and the weight issues they've already got, I just think that we have tremendous growth ahead of us.
Confidence in One Diet Above All
By KEN JAWOROWSKI
Published: December 31, 2005
Linda Huett walked into a Weight Watchers meeting in the early 1980's, hoping to lose weight after the birth of her third child. It worked, and then some: she soon took a job at the company, was promoted to manager and later to a vice president. In 2000, Ms. Huett was named chief executive.
Given Wall Street's predilection for business-school-bred leaders, such a success story is a bit unusual. But investors appear to have faith in the company, which has posted a profit in every quarter since going public in 2001: even as Atkins Nutritionals filed for bankruptcy this summer, shares of Weight Watchers rose more than 20 percent in 2005. Customers evidently have confidence in the company as well - each week, about 1.5 million people attend one of its 46,000 meetings in 30 countries, making it the world's largest operator of weight-loss centers and giving it annual revenue of more than $1 billion.
Ms. Huett spoke recently about the company. Following are excerpts from that conversation:
Q. Do you still go to meetings?
A. Absolutely. I just went to a meeting a couple of weeks ago. I try to go as often as I can. It is what we're about. We are a brand - we're only a brand - our service and our philosophy. So if you think of us more as a group education than as just a diet, you'd probably understand why our meetings are so important.
Q. How do you manage a company that is so spread out?
A. You don't manage an infrastructure that big. What you do is hope that you have very, very talented people who are actually managing the infrastructure on your behalf. We are, though, a very flat organization. We're very close to the ground. I'm very close to our customer. So we really rely on a lot of talented layers between me and what happens in each one of those 46,000 meetings. But what happens in each of those 46,000 meetings is what really makes this company thrive and has kept us in business all these years.
Q. Is the low-carb dieting craze over?
A. I called it a sort of tidal wave at the time. It was really unprecedented how big it came, how fast it came. And then I think, as a tidal wave, it washed its way through and we've come out the other side.
People are looking for solutions and I fully understand that. And because we're more sane, sensible, steady, balanced - it's maybe not as sexy as the latest sort of miracle, if you like. But in a sense we are the place that people ultimately end up, where they want to do something long term. I think that a low-carb regime, like any other regime that's asking you to do something quite extreme, they just are unsustainable. And our research has shown us that for decades.
Q. What percentage of your clients are women?
A. The vast majority. If I'm looking at it worldwide it's about 95 percent. If I'm looking at the U.S. it's probably about 91 percent.
Q. Does the company have any programs aimed at men? That seems like an underserved market.
A. We've done a lot of research in the last few years and we do have programs under development. I don't imagine that we're going to have a meaningful offering until probably the start of 2007.
I think doctors now are much more proactive in talking to their patients and challenging their patients if they do have a weight issue. And I think that this has really woken men up to the fact that this isn't just a vanity issue.
Q. Why should an investor buy your stock?
A. If you look at our track record, for the past six years you can see incredibly strong growth. You'll know that we have a diversified source of that growth in licensing, which has been growing by leaps and bounds. We're doing it very cautiously and carefully. But our brand is that powerful. We have the products that we sell directly to the consumer and we are doing that, obviously, in our meetings, and we have other proprietary distribution methods like our Web site.
We have huge markets to go into. If you're looking at Asia, if you're looking at some of the developing countries and the weight issues they've already got, I just think that we have tremendous growth ahead of us.