WeightWatchers 2008 Annual Report Download - page 14

PART I
Item 1. Business
Overview
We are a leading, global-branded consumer company and the world’s leading provider of weight
management services, operating globally through a network of Company-owned and franchise operations. With
over four decades of weight management experience, expertise and know-how, we have established Weight
Watchers as one of the most recognized and trusted brand names among weight-conscious consumers. In 2008,
consumers spent over $4 billion on Weight Watchers branded products and services, including meetings
conducted by us and our franchisees, products sold at meetings, Internet subscription products sold by
WeightWatchers.com, licensed products sold in retail channels and magazine subscriptions and other
publications.
The high awareness and credibility of our brand among all types of weight-conscious consumers—women
and men, consumers online and offline, the support-inclined and the self-help-inclined—provide us with a
significant competitive advantage and growth opportunity. As the number of overweight and obese people
worldwide grows, we believe our global presence and brand awareness uniquely position us to capture an
increasing share of the global weight management market through our core meetings business and our additional
growth vehicles, such as WeightWatchers.com and our licensing efforts.
In the more than 45 years since our founding, we have built our meetings business by helping millions of
people around the world lose weight through sensible and sustainable food plans, exercise, behavior modification
and group support. Each week, approximately 1.4 million members attend over 50,000 Weight Watchers
meetings around the world, which are run by more than 16,000 leaders—each of whom has lost weight on our
program. We are constantly improving our scientifically-based weight management approaches, and we are one
of only a few commercial weight management programs whose efficacy has been clinically proven. Our strong
brand, together with the effectiveness of our plans, loyal customer base and unparalleled network and
infrastructure, enable us to attract new and returning members efficiently. Our customer acquisition costs are
relatively low due to both word of mouth referrals and our efficient mass marketing programs.
Through WeightWatchers.com, we offer Internet subscription weight management products to consumers
and maintain an interactive presence on the Internet for the Weight Watchers brand. We believe
WeightWatchers.com is the global leading provider of weight management Internet subscription products.
Currently, we provide two Internet subscription offerings: Weight Watchers Online and Weight Watchers eTools.
Weight Watchers Online provides interactive and personalized resources that allow users to follow our weight
management plans via the Internet. Weight Watchers eTools is the Internet weight management companion for
Weight Watchers meetings members who want to interactively manage the day-to-day aspects of their weight
management plans on the Internet. We currently offer these two products in the United States, the United
Kingdom, Canada, Germany, France, the Netherlands and Australia.
Our licensing revenues have been steadily growing in both the United States and internationally. Companies
show continued interest in licensing our brand and other intellectual property as a platform to build their
businesses since the Weight Watchers brand brings high credibility and access to the weight-conscious
consumer. By partnering with carefully selected companies in categories relevant and helpful to weight-
conscious consumers, we have created a highly profitable licensing business as well as a powerful vehicle to
reinforce the Weight Watchers brand in the minds of our target consumers.
The Global Weight Management Market
We participate in the global weight management market. According to Marketdata Enterprises, the weight
management industry had revenue of approximately $55 billion in 2006 in the United States alone. The number
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