Weight Watchers hired HSN chief executive officer Mindy Grossman to be its CEO in a move designed to use her retail expertise to turn around the diet plan company.
Robert Ferris of CNBC.com had the news:
Grossman will start her new job as president and CEO for the weight-loss brand in July. She will also have a seat on the company’s board of directors.
Shares of Weight Watchers were up 11 percent in after-hours trading.
Weight Watchers CFO Nicholas Hotchkin, and board members Thilo Semmelbauer and Christopher Sobecki will run the company until Grossman assumes the role.
Grossman joined IAC, HSNi’s former parent in 2006, and took HSNi public in 2008. Under her guidance, the company expanded its business, making big inroads in online commerce. Today, nearly half of HSNi’s revenue comes from online sales.
She also is the chair of the National Retail Federation’s board.
Weight Watchers shares are up 40 percent over the past year.
Lauren Gensler of Forbes reported that Grossman turned around the online shopping channel:
Grossman first took the reins at HSN in 2008 and has become a major force in e-commerce. She has turned around the home shopping television channel in part by livening it up with live concerts and celebrity sellers like P.Diddy and Serena Williams. The channel’s audience has swelled under her tenure and digital sales now account for roughly half of HSN’s $3.6 billion in revenue.
“Over her illustrious career, she has worked with some of the biggest brands and has consistently translated consumers’ interests and aspirations into visionary innovations,” said Ray Debbane, who is chair of Weight Watchers’ board and its biggest shareholder through his investment firm.
Grossman, who had previous stints at Ralph Lauren, Nike and Tommy Hilfiger, looks likely to continue in Weight Watchers’ tradition of leveraging celebrity spokespeople to bolster the company’s image and membership. In 2015, Oprah Winfrey came on as an investor and brand ambassador, sending shares skyrocketing and making hundreds of millions of dollars in paper gains. Other celebrity spokespeople over the years have included Jennifer Hudson, Jessica Simpson and Jenny McCarthy.
Weight Watchers was founded in 1963 and has struggled recently as fitness trackers and do-it-yourself diet and fitness programs rise in popularity. However, the company swung to a profit in its latest quarter and saw its membership ranks climb 8% to 2.6 million. Its stock price has doubled this year.
Robert Trigaux of the Tampa Bay Times reported that HSN’s success has faltered recently:
However, HSN’s financial performance has suffered in recent years. From a recent high of more than $77 a share in early 2015, HSN’s stock closed Wednesday at $36.50. That means HSN’s market value has tumbled to $1.9 billion, half of what it was at its peak price. HSN still faces many challenges with retail stores closing and shopping habits changing rapidly. Over the past year, Grossman herself noted repeatedly how consumers have grown more distracted by so many digital choices and even last year’s combative presidential campaign.
Industry rumors that Grossman might be leaving HSN began to circulate early this year, at the same time that she was named chair of the National Retail Federation in New York. Some veteran retail observers, however, were caught off guard by her latest career move.
“In a sense it surprises me only because Weight Watchers is a strong brand but it doesn’t have the cache (as HSN), obviously because it deals with overweight people, not skinny, sexy people,” said Jeff Green, a Phoenix-based expert on the retail industry.
HSN “has had a rough time, but it’s because people’s shopping patterns have changed,” he said. “Maybe (Grossman’s) idea was, one, to get away from pure retail and, two, to take Weight Watchers in a retail direction that’s not affected by the internet, meaning expanding food products. Weight Watchers has a pretty good selection in grocery stores but I think it could be bigger.”
