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Analysts Say Weight Watchers Still Faces Problems, Even With Oprah Winfrey on Board

| Oct 26, 2015 07:34 AM EDT

Oprah Winfrey buys 10% shares in Weight Watchers

It's no longer news that business mogul Oprah Winfrey bought 10% stake in weight loss company Weight Watchers, and also joined its board in order to help move the company forward - but business analysts say Weight Watchers may still not be out of the woods yet even with the miracles Oprah is capable of doing.

With the "Oprah Effect," everybody is aware that whatever Oprah touches turns to gold, and her endorsement has saved many businesses from tipping over into collapse. She endorsed the old book "Anna Karenina" through her book club in 2004 and the book went on to become a top bestseller on USA Today's Best-Selling List; and she mentioned a particular dress as her favorite and the maker of the dress shot to national limelight within a month or so.

But the problem is that Weight Watchers have a lot of free apps that are competing with its business model, and people have a changing attitude to health and wellbeing by changing to cheaper and equally effective alternatives.

"Weight Watchers has some significant business challenges that will not be solved alone - by even the most resolute celebrity," said University of Southern California marketing Professor Jeetendr Sehdev.

Oprah has given her name and face to Weight Watchers for the next five years, while also latching into its business and board, but she might need to do more than that to bring Weight Watchers out of the woods. She has on countless occasions opened up about the problems she's facing with weight, and added that Weight Watchers might be able to help her out now.

"Weight Watchers has given me the tools to begin to make the lasting shift that I and so many of us who are struggling with weight have longed for," Winfrey said in a statement. "I believe in the program so much I decided to invest in the company and partner in its evolution."

People will actually believe what Oprah believes, but belief does not translate to making products work. "Regardless of how much Ms. Winfrey contributes to the marketing of Weight Watchers, a well-designed new program is necessary for the company's success," Barclays analyst Meredith Adler wrote to clients.

Some people have charged that Weight Watchers' products have not been too effective in helping them lose beyond a few pounds, but apart from this, fitness apps such as MyFitnessPal and iTrackBites simulate an experience that is almost like that Weight Watchers provides, and these are cheaper.

Another problem the company faces is with doctors who do not believe in its point vs nutrition program. "Weight Watchers' guidelines for healthy eating are simply unhealthy," Dr. Joel Furhman wrote, "and not supported by the most updated nutritional science."

There is also the angle of people seeing Oprah as a yo-yo dieter, and the fact of people's mentality and attitude changing constantly regarding treatment options and what works for them. Weight Watchers might have a lot to do to achieve greater success aside having Oprah on board to paddle along.  

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