WeightWatchers 2010 Annual Report Download - page 29

I
tem 1A. R
i
sk Factors
Y
ou should consider carefully, in addition to the other information contained in this Annual Report on For
m
10-K and the exhibits hereto, the following risk factors in evaluating our business. Our business, financial
condition or results of operations could be materially adversely affected by any of these risks. The following
discussion of risks is not all inclusive but is designed to highlight what we believe are the most significant risk
s
that we face. Additional risks and uncertainties, not presently known to us or that we currently deem immaterial
,
may also impair our business, financial condition or results of operations
.
C
ompet
i
t
i
on
f
rom other we
i
ght management
i
ndustry part
i
c
i
pants or the development o
f
more e
ff
ect
i
ve or
more
f
avorably perce
i
ved we
i
ght management methods could result
i
n decreased demand
f
or our serv
i
ce
s
an
d
pro
d
ucts
.
T
h
ewe
i
g
h
t management
i
n
d
ustry
i
s
hi
g
hl
y compet
i
t
i
ve. We compete aga
i
nst a w
id
e range o
f
prov
id
ers o
f
we
i
g
h
t management serv
i
ces an
d
pro
d
ucts. Our compet
i
tors
i
nc
l
u
d
e: se
lf
-
h
e
l
pwe
i
g
h
t management reg
i
mens an
d
o
t
h
er se
lf
-
h
e
l
pwe
i
g
h
t management pro
d
ucts an
d
pu
bli
cat
i
ons suc
h
as
b
oo
k
s, tapes an
d
magaz
i
nes; commerc
i
a
l
we
i
g
h
t management programs; Internet we
i
g
h
t management approac
h
es;
di
etary supp
l
ements an
d
mea
l
r
ep
l
acement pro
d
ucts; we
i
g
h
t management serv
i
ces a
d
m
i
n
i
stere
db
y
d
octors, nutr
i
t
i
on
i
sts an
ddi
et
i
c
i
ans; surg
i
ca
l
p
roce
d
ures; t
h
ep
h
armaceut
i
ca
li
n
d
ustry; government agenc
i
es an
d
non-pro
fi
t groups t
h
at o
ff
er we
i
g
ht
management serv
i
ces; an
dfi
tness centers. A
ddi
t
i
ona
l
compet
i
tors may emerge as new or
diff
erent pro
d
ucts or
met
h
o
d
so
f
we
i
g
h
t management are
d
eve
l
ope
d
an
d
mar
k
ete
d
. More e
ff
ect
i
ve or more
f
avora
bl
y perce
i
ve
ddi
e
t
an
d
we
i
g
h
t management met
h
o
d
s,
i
nc
l
u
di
ng p
h
armaceut
i
ca
l
treatments,
f
at an
d
sugar su
b
st
i
tutes or ot
h
e
r
tec
h
no
l
og
i
ca
l
an
d
sc
i
ent
ifi
ca
d
vances
i
nwe
i
g
h
t management, a
l
so may
b
e
d
eve
l
ope
d
.T
hi
s compet
i
t
i
on may
r
e
d
uce
d
eman
df
or our serv
i
ces an
d
pro
d
ucts
.
The purchasing decisions of weight management customers are highly subjective and can be influenced b
y
many factors, such as brand image, marketing programs, cost and perception of the efficacy of the service and
p
roduct offerings. Moreover, customers can, and frequently do, change weight management approaches easil
y
and at little cost. For example, in fiscal 2003 and fiscal 2004, our revenue growth was adversely affected by
increased popularity and media exposure of low-carbohydrate diets. Any decrease in demand for our services and
p
roducts may adversely affect our business, financial condition or results of operations.
If
we do not cont
i
nue to develop
i
nnovat
i
ve new serv
i
ces and products or
if
our serv
i
ces and products do
not cont
i
nue to appeal to the market, our bus
i
ness may su
ff
er
.
T
h
ewe
i
g
h
t management
i
n
d
ustry
i
ssu
bj
ect to c
h
ang
i
ng customer
d
eman
d
s
b
ase
d
,
i
n
l
arge part, on t
h
e
e
ffi
cacy an
d
popu
l
ar appea
l
o
f
we
i
g
h
t management programs. Our
f
uture success
d
epen
d
s on our a
bili
ty t
o
cont
i
nue to
d
eve
l
op an
d
mar
k
et new serv
i
ces an
d
pro
d
ucts an
d
to en
h
ance our ex
i
st
i
ng serv
i
ces an
d
pro
d
ucts
,
eac
h
on a t
i
me
l
y
b
as
i
s to respon
d
to new an
d
evo
l
v
i
ng customer
d
eman
d
s, ac
hi
eve mar
k
et acceptance an
dk
ee
p
p
ace w
i
t
h
new nutr
i
t
i
ona
l
an
d
we
i
g
h
t management
d
eve
l
opments. We may not
b
e success
f
u
li
n
d
eve
l
op
i
ng
,
i
ntro
d
uc
i
ng on a t
i
me
l
y
b
as
i
s or mar
k
et
i
ng any new or en
h
ance
d
serv
i
ces an
d
pro
d
ucts, an
d
we cannot assure yo
u
t
h
at any new or en
h
ance
d
serv
i
ces or pro
d
ucts w
ill
appea
l
to t
h
e mar
k
et. Our
f
a
il
ure to
d
eve
l
op new serv
i
ces an
d
p
ro
d
ucts an
d
to en
h
ance our ex
i
st
i
ng serv
i
ces an
d
pro
d
ucts or t
h
e
f
a
il
ure o
f
our serv
i
ces an
d
pro
d
ucts to cont
i
nue
to appea
l
to t
h
e mar
k
et cou
ld h
ave an a
d
verse
i
mpact on our a
bili
ty to attract an
d
reta
i
n mem
b
ers an
d
su
b
scr
ib
ers
an
d
t
h
us a
d
verse
l
ya
ff
ect our
b
us
i
ness,
fi
nanc
i
a
l
con
di
t
i
on or resu
l
ts o
f
operat
i
ons.
O
ur business depends on the effectiveness of our marketin
g
and advertisin
g
pro
g
rams to attract and retai
n
m
e
m
be
r
sa
n
d subsc
ri
be
r
s.
Our
b
us
i
ness success
d
epen
d
s on our a
bili
t
y
to attract an
d
reta
i
n mem
b
ers to our meet
i
n
g
san
d
su
b
scr
ib
ers t
o
W
e
igh
tWatc
h
ers.com. Our a
bili
t
y
to attract an
d
reta
i
n mem
b
ers an
d
su
b
scr
ib
ers
d
epen
d
ss
ig
n
ifi
cant
ly
on t
h
e
e
ff
ect
i
veness o
f
our mar
k
et
i
n
g
pract
i
ces. I
f
our mar
k
et
i
n
g
an
d
a
d
vert
i
s
i
n
g
campa
ig
ns
d
o not
g
enerate a su
ffi
c
i
ent
num
b
er o
f
mem
b
ers an
d
su
b
scr
ib
ers, our resu
l
ts o
f
operat
i
ons w
ill b
ea
d
verse
ly
a
ff
ecte
d
.
13