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Tuesday, 15 January, 2002, 09:34 GMT
Cashing in on slimmer ambitions
Paying money to lose weight graphic
by BBC News Online's Briony Hale

January - and the annual influx of determined individuals committed to shifting a few pounds shows no sign of abating.

Slimming clubs - led by Weight Watchers - are signing in more customers than ever before.

Linda Huett, President and Chief Executive of Weight Watchers
Weight Watchers' chief first joined classes in London
With minds intent on weight loss, few dieters are worried about the other pounds they will be shedding in the form of weekly fees.

And yet as the weight comes off the slimmers, the companies are piling on the profits.

Weight Watchers is a testimony to the financial success of slimming firms.

It enjoyed one of the most successful flotations of 2001 - while a wide range of other companies suffered a miserable year and the market for new listings all but dried up amid a great deal of stock market gloom.

Spreading out

"We've seen five years of very consistent growth worldwide," Linda Huett, president and chief executive of Weight Watchers told BBC News Online

"I see no reason why we can't consistently deliver strong growth. The sad fact is that as nations we're just getting heavier and more people are facing a weight problem."

The company now runs more than 37,000 classes - in countries such as Australia, Mexico, South Africa, Latvia, Hong Kong and the Cayman Islands - with attendance growing 13% every year for the last three years.


As far as I'm concerned, I've lost weight and maintained it... to me it was worth every ha'penny

Linda Nicholson
Weight Watcher

In the UK alone, weight watchers holds 6,000 meetings a week, with an average of 40 members - each paying 4.50.

That's revenues of over 1m pounds each week - with relatively few overheads other than the hourly rental of a church hall and the salary of one or two employees, usually part-time and working on commission.

Then there's the profitable business of selling a wide assortment of diet accessories - including healthy snack food, recipe books, CDs and calorie counting calculators.

Share success

Given the way that the firm is growing - and some alarming statistics about rising obesity in the Western world - it is perhaps no surprise that investors decided the firm was a safe bet.


It's tapping into people's vulnerabilities

Lindsay Allen
Actress

With a starting price of $24, the stock rocketed by almost a fifth on its first day of trading and has stayed above $30 for the past seven weeks.

Click here to see a graph of Weight Watcher's share price.

Perhaps more surprising than the enthusiasm of investors, is the enthusiasm of class attendees despite their knowing the firm is on target to report annual profits of well over $200m.

Successful weight loss, it seems, overshadows any worries about profiteering.

"Yes, it does cost quite a lot, but I don't mind paying because it was the only thing which made me stick to the diet," said Becky Openshaw, a lecturer from Rickmansworth.

Sarah Ferguson, Weight Watchers figure head
Sarah Ferguson is a figurehead for the plan

"In some ways it's paying to extend your life and improve its quality."

"Initially I thought - why should I be paying to lose weight? But as the weight came off, I realised the value of the classes," said Linda Nicholson, from Manchester who has been a member of Weight Watchers for 18 years and is now a class leader.

"As far as I'm concerned, I've lost weight and maintained it. To me it was worth every ha'penny."

She even seemed unconcerned about the $417.6m raked in - and not reinvested into the Weight Watchers business - by the private investment firm Artal Luxembourg when in floated a 17% stake last November.

"I say well done to them - they came up trumps," Ms Nicholson told BBC News Online.

Disaster benefits

Not even the depressing combination of an economic slowdown and the tragic events of 11 September has been able to suppress the growth of the classes.

Weight Watchers, expanding profits, year ending in April
1999-2000: $198.1m
1998-1999: $185.7m
1997-1998: $137.2m

Profits for the first nine months of 2001 rose an impressive 63.5% to $160m.

"When there are a lot of things going wrong in your life, taking control of [your weight] makes you feel you're doing something that is good," explains Ms Huett.

And even the rise in unemployment has been a boon for the diet business.

"When people are having to go out into a job market, taking control or your weight and feeling better about how you present yourself to strangers is also a positive," said Ms Huett.

Room for growth

Of course, some people have more reservations about the money being made by slimming clubs.

Percentage of women aged 25-64, who have attended Weight Watchers
UK: 20%
US: 7%
Sweden: 13%
Finland: 10%
Germany: 2%

"It's tapping into people's vulnerabilities," said Lindsay Allen, an actress from south London.

While that is indisputably true, so is the fact that more and more people are desperate to lose weight.

And, as Ms Huett explains, there are plenty new areas for Weight Watchers to target - more male slimmers, interactive dieting through the internet and new regions of the world.

Only 1% of British woman like the way they look, while 70% say they are depressed by their appearance, according to a recent survey by Newwoman.co.uk.

And health experts warned earlier this year that obesity is rising to epidemic levels and is now affecting more than 300 million people worldwide.

So as people keep on growing, Weight Watchers is likely to be doing the same.

Return to the story

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 ON THIS STORY
Linda Huett, Weight Watchers president
We've benefitted from the economic downturn and unemployment
Linda Huett
"It's not a large investment on a weekly basis"
Linda Huett
"We've seen five years of consistent growth"
See also:

13 Dec 01 | UK
Dangers of a poor diet
26 Nov 01 | Health
Why some are prone to obesity
15 Nov 01 | Business
Weight Watchers' shares bounce
05 Nov 01 | Health
Survey highlights diet headache
30 May 01 | Health
Obesity epidemic warning
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