Speaker 1: This is Bloomberg Business Week with Carol Messer and Jason
Speaker 1: Kelly on Bloomberg Radio. Welcome Mindy Grossman. She's president and
Speaker 1: CEO of WW International. She joins us on the phone
Speaker 1: from the Hudson Valley and Mindy, Jason and I in
Speaker 1: our whole Bloomberg community, delighted to have you here with us,
Speaker 1: Curious to hear how your family is doing, your corporate
Speaker 1: family is doing it doing. You know now that we're
Speaker 1: fifteen weeks into the shutdown and now starting to slowly reopen,
Speaker 1: so thrilled to be here. I hope you and Jason
Speaker 1: are both terrific. We've been up here um since March sixteenth,
Speaker 1: so been uh certainly I think a surreal time for everyone.
Speaker 1: But we're doing well. Um. To your point, Carol, you know,
Speaker 1: we entered the year with unbelievable momentum. You know, we
Speaker 1: had launched my w W, We were in the throes
Speaker 1: of our digital transformation. We did a nine city tour
Speaker 1: with Oprah, touching you know, a hundred and thirty five
Speaker 1: thousand people, and you know, then all of a sudden
Speaker 1: mid March, um, the world changed and we had to
Speaker 1: quickly pivot. Um not only for the safety and security
Speaker 1: of our employees and our members, but it was important
Speaker 1: to us that we kept our community together because of
Speaker 1: our approximately five million members who are all digital, per
Speaker 1: cent of them also attended our studios. So in March,
Speaker 1: in six days, we had to train fourteen thousand coaches.
Speaker 1: We pivoted our whole products and tech team, and simultaneously
Speaker 1: in twelve countries we launched UH virtual workshops, which in
Speaker 1: the first week we had fifteen thousand and they're still
Speaker 1: continuing today. UM. And that pivot for us, even though
Speaker 1: we saw suppressed UM you know subscribe option starting in
Speaker 1: you know, mid March, that started really picking up again
Speaker 1: UH starting in mid April, and you know now our
Speaker 1: digital subscribers are at an all time high, as is
Speaker 1: our retention. And it was our maniacal focus on not
Speaker 1: losing our community in a world where community and motivation
Speaker 1: and support are really more important than ever, just even
Speaker 1: psychologically for people. UM. We also took the learnings from
Speaker 1: the tour we did physically with OPRAH and said, what
Speaker 1: can we do for people who need this now more
Speaker 1: than ever, And we launched the four week every Saturday
Speaker 1: virtual tour with OPRAH and made the decision to make
Speaker 1: it free globally for everyone, because it's really what people
Speaker 1: needed right now. And that's what our brand has stood
Speaker 1: for since the very beginning. And we had just in
Speaker 1: the first one over half a million people live and
Speaker 1: we've now had millions of people watched the content. UM.
Speaker 1: So what we've been trying to do is use this
Speaker 1: as an opportunity to accelerate our digital transformation, UM, reduce
Speaker 1: our real estate fookprint, be able to add, you know,
Speaker 1: to the ecosystem of wellness. And you know, I think
Speaker 1: now we're seeing more than ever health and wellness is
Speaker 1: on top of everybody's mind. It's not a luxury anymore.
Speaker 1: It's a necessity. And so talk about Mindy and I
Speaker 1: believe we've talked about this before. You've mentioned here a
Speaker 1: couple of times, the Oprah effect here, I mean, what
Speaker 1: has she done for the brand, especially in this time
Speaker 1: it feels almost more important to have that voice for
Speaker 1: a variety of reasons. Yeah, you know, she has been
Speaker 1: such a partner to me since, you know, the day
Speaker 1: I joined the company, certainly as a board member, but
Speaker 1: also as a thought partner in how can we work
Speaker 1: together to really give people the tools and the motivation
Speaker 1: so they can really live their best, healthiest lives. So
Speaker 1: you know, if you look at what we've built out
Speaker 1: in terms of this wellness ecosystem, whether it's nutrition or
Speaker 1: activity or mindset, motivation, sleep, relationships, whatever, that is having
Speaker 1: Oprah and her voice to be able to amplify, and
Speaker 1: it's really her superpower is to galvanize people. And we
Speaker 1: really saw it on the tour and we also saw
Speaker 1: it on his virtual tour, and I know she feels
Speaker 1: UM now more than ever. What we bring UM is
Speaker 1: going to be more critical for people. And you know,
Speaker 1: as we talked about moving into the broader scope of wellness,
Speaker 1: we said, we're never going to abdicate our global leadership
Speaker 1: in healthy weight loss, which is so important. If you
Speaker 1: look at the number one factor in COVID deaths with obesity,
Speaker 1: diabetes is a huge factor. And we're seeing from all
Speaker 1: our data in terms of why people are joining UM
Speaker 1: and what is that what is top of mine? It's
Speaker 1: I need to be healthy, not just for me, but
Speaker 1: healthy to others. I need to not get sick to
Speaker 1: get healthy. I need to prevent what is happening. And
Speaker 1: I think you know, COVID has really changed the mindset.
Speaker 1: The other thing it's done, though, it's really identified the
Speaker 1: health disparities amongst communities, and I think that's going to
Speaker 1: be a big focus as well. We've we've had these
Speaker 1: conversations Mandy with a lot of the members of the
Speaker 1: medical community that we've had on air about you know,
Speaker 1: this is obviously a healthcare crisis, but it also speaks
Speaker 1: to the health of so many different you know, so
Speaker 1: many Americans and the difficult spot that they're in. One
Speaker 1: thing I wanted to ask you is, in terms of
Speaker 1: what you guys have seen, Um, the pivot to even
Speaker 1: more digital because of the shutdown is the virus potentially
Speaker 1: the catalyst. Are finally moving to a digital only model. Look,
Speaker 1: I think any company that has not used this as
Speaker 1: an opportunity to accelerate the digital transformation is going to
Speaker 1: be left behind. That's the reality. However, the way we
Speaker 1: feel is it's not like face to face will go
Speaker 1: away completely. Um, we will have a smaller footprint. But
Speaker 1: even before COVID, we had a new product that is
Speaker 1: going to launch later this year, which is Digital plus
Speaker 1: virtual group coaching, So our digital platform, but more support
Speaker 1: in terms of coach motivation so once we launch that,
Speaker 1: we will have a suite of tools that people can
Speaker 1: look at and decide what is right for them. It's
Speaker 1: kind of picking my WW and we've been on this
Speaker 1: personalization journey, so not only do people obviously take an
Speaker 1: assessment for what program they want to be on for
Speaker 1: health and weight loss, but now they're going to have
Speaker 1: a suite of options in terms of what they feel
Speaker 1: is right for them. We we just started opening reopening
Speaker 1: our studios and by the end of this month we
Speaker 1: will have about four hundred studios open. And we started
Speaker 1: obviously safety and security. It started with people could come
Speaker 1: in and have a one on one session with their
Speaker 1: coach um Way and they could buy products. But by
Speaker 1: the end of the month we will have very strategic,
Speaker 1: smaller groups based on the size and based on the
Speaker 1: rules of whatever the location is. UM But we are
Speaker 1: really seeing that there are people who feel that they
Speaker 1: want that accountability, that interaction and that motivation, and then
Speaker 1: there are other people who really just want the support
Speaker 1: of their digital community UM and you know Connect, which
Speaker 1: is our digital social platform UM. We also launched Connect
Speaker 1: groups for people who were going through specific struggles right now,
Speaker 1: Young moms imagine college students. A lot of them don't
Speaker 1: even know if they can go back to school or not.
Speaker 1: So what we're trying to do is give people that
Speaker 1: support and community no matter where they are, no matter
Speaker 1: how they want to interact. We're going to continue our
Speaker 1: conversation with Mandy Grossmen now and so, Mandy, I I mean,
Speaker 1: I do wonder in terms of your workforce, how has
Speaker 1: that gone in terms of letting people go bringing them back.
Speaker 1: What's been the rhythm of that and the financial implications,
Speaker 1: especially as you talk about this sort of hybrid model
Speaker 1: going forward. Help us understand the workforce here. Yeah, Well,
Speaker 1: what we had to do is we had to take
Speaker 1: a very very hard look at our physical footprint around
Speaker 1: the world, and to give you a perspective, we have
Speaker 1: locations that are branded owned and operated, and then we
Speaker 1: also have locations that are in other non owned and
Speaker 1: clearly right now, those are ones we can't necessarily control
Speaker 1: and the safety securities that are number one. Number two,
Speaker 1: we've obviously seen the ramp up significantly of our digital recruitment.
Speaker 1: So we did an entire review and we made the
Speaker 1: decision to reduce our footprint, which unfortunately had to make
Speaker 1: the difficult decision to shrink a number of our field
Speaker 1: organization and you know it, it's always difficult to do that,
Speaker 1: but UM, for the future of where our company is
Speaker 1: going and where we need to put the investment, that
Speaker 1: was the right thing to do. UM. And so of
Speaker 1: the four hundred studios in the US that will be
Speaker 1: opened by the end of the month, those are WW
Speaker 1: studios is the worst over mindy when it comes to
Speaker 1: cutting costs, letting workers go. I'm just curious about the
Speaker 1: visibility you feel feel like you have. We've we've got
Speaker 1: our big invest conference going on, and you hear different
Speaker 1: things about people not still sure about how tricky it's
Speaker 1: going to be, you know, as we reopen more. Yeah. Look, UM,
Speaker 1: you know, I tend to be a resilient optimist. And
Speaker 1: of course we've had to do a lot of different modeling. UM.
Speaker 1: You know. But last week, UM, when we announced the
Speaker 1: amendment to our revolving credit facility, just to give us
Speaker 1: more flexibility. We also gave an update on our business
Speaker 1: performance UM, which, as I said, particularly since mid April,
Speaker 1: are digital subscriber growth has been very strong. So you know,
Speaker 1: at the end of first quarter we were at five
Speaker 1: million subscribers you normally see a dip from there, but
Speaker 1: we're still over four point nine and our retentions at
Speaker 1: an all time high, so it's not like we're not
Speaker 1: being cautious. We could do an expense reduction of about
Speaker 1: a hundred million dollars um to make sure that, um,
Speaker 1: you know, we had contingencies and we were going to
Speaker 1: have the right liquidity, um, you know, but there's still uncertainty.
Speaker 1: There's uncertainty if we have a big spike. UM. So
Speaker 1: I think, you know, our focus is doing all the
Speaker 1: right things for the business, to continue to focus on
Speaker 1: our virtual workshops and digital recruitment, but more important really
Speaker 1: being more of a necessity for people right now, um,
Speaker 1: you know, and as this is on top of their mind,
Speaker 1: and you know, just since um you know, covid and
Speaker 1: obviously these were in the plan. We launched hydration tracking,
Speaker 1: sleep tracking, live content within our app. Across our verticals,
Speaker 1: we integrated uh fit on, which is video fitness. We
Speaker 1: now have a full suite of video fitness classes, an
Speaker 1: extensive sweet in addition to audio fitness and headspace. Um.
Speaker 1: So really, what we've also done is we did a
Speaker 1: massive pivot around all our content because you know, again,
Speaker 1: we have almost five million people on our app tracking
Speaker 1: and mean I could tell you on a week to
Speaker 1: week basis of different things that people are eating and
Speaker 1: has working out. Also what they're talking about. Well, that's
Speaker 1: what they think. That's really important and you have to
Speaker 1: have the relevant content for them. Well that's so true,
Speaker 1: and it's really fascinating that you are constantly and it
Speaker 1: makes sense, you know, tracking it to see what people want.
Speaker 1: You have to write what consumer changes are you seeing
Speaker 1: because we really feel like there's been some shifts and
Speaker 1: maybe what consumers want overall, how they're doing things as
Speaker 1: they've been stuck home. Yeah. So I think at a
Speaker 1: very high level, as I said earlier, this idea of
Speaker 1: you know, wellness going from being a luxury doing a
Speaker 1: stetsy and people really taking um, you know, evaluation of
Speaker 1: themselves and their life. And I think, um, there's going
Speaker 1: to be a real reappraisal of how people live, how
Speaker 1: they work, how they spend, and what they value um
Speaker 1: And I think that's going to be uh really important.
Speaker 1: The other thing that we see is it used to
Speaker 1: be you know, people wanted to fix something when it
Speaker 1: was broken. Right. I get sick. I need something to
Speaker 1: help me get well. I think now it's I want
Speaker 1: to be well so I don't get sick. And that's
Speaker 1: a big mindset change. You know, people, you don't want
Speaker 1: to be vulnerable. The other thing, UM we're seeing is
Speaker 1: I think the mental stress that this is really created
Speaker 1: for people that's not going away overnight, so you know,
Speaker 1: mental health and a lot of content UM in that
Speaker 1: area I think is really going to be important. UM.
Speaker 1: And then the power of trust and community. UM. You know,
Speaker 1: I think uh, you know, people UM, in in times
Speaker 1: of uncertainty, they want to gravitate towards those brands that
Speaker 1: they trust. And certainly for us, UM, you know, everything
Speaker 1: we do is science base. UM. It's been that way
Speaker 1: from the beginning. There's a community and so our entire
Speaker 1: organization has really been very focused on serving versus selling. Really, UM,
Speaker 1: you know, how can we do you know, whatever we
Speaker 1: can to you know, enhance lives. I think the other
Speaker 1: thing that's been important is, you know, I think consumers
Speaker 1: are looking for brands that they really feel have purpose.
Speaker 1: And you know, I've always been a firm believer that
Speaker 1: you know, today brands that can marry technology plus meaning
Speaker 1: to help people with better connected lives. That's going to
Speaker 1: be important, and there's going to be a different measurement
Speaker 1: from consumers when they look at brand and you know,
Speaker 1: how they managed through this and how they were thinking
Speaker 1: ultimately of you know who they serve. UM. So maybe
Speaker 1: I gotta ask you, because Carol and I both know
Speaker 1: you pretty well. We've watched your career, and I wonder
Speaker 1: you've managed through all sorts of crises before. What's different
Speaker 1: about this one? From a leadership perspective and from the
Speaker 1: CEO seat? Yeah. You know, I thought when I took
Speaker 1: my last company public in August two thousand and eight,
Speaker 1: that was kind of going to be the biggest crisis
Speaker 1: I would have UM throve through. UM, this has been.
Speaker 1: This has been very different. UM. Number one, this is
Speaker 1: truly global. UM. You know. Number two, there's an aspect
Speaker 1: of uncertainty that we've never had before. UM. You know
Speaker 1: number three, it has made us all isolate in a
Speaker 1: very different way. UM. And all of those things you know,
Speaker 1: you have to take in from a leadership UH perspective
Speaker 1: and right now and you know, not that it wasn't then,
Speaker 1: but the need to a communicate. I'm not just the CEO,
Speaker 1: I'm the chief communication officer, the chief crisis officer, the
Speaker 1: chief hope officer. What people are needing and feeling right now,
Speaker 1: UM is they they want to know, you know, where
Speaker 1: they stand, what is happening at any given time. And
Speaker 1: you know, my feeling is control what you can control,
Speaker 1: O people, what you're doing, Galvanize them around what you
Speaker 1: can do, UM, and and keep that focus. And I'm
Speaker 1: very fortunate that you know, our leadership team has really
Speaker 1: come together. I mean, we've we've built a culture of
Speaker 1: purpose and they're galvanized around how what we can do,
Speaker 1: and I'm galvanized around what we can do for them
Speaker 1: and for other I think the other thing that's different
Speaker 1: this time is the world has changed since then. And UM,
Speaker 1: authenticity is really important. I say that, you know, people
Speaker 1: used to think vulnerability was a weakness. It's a strength. UM.
Speaker 1: People want to understand if they're feeling, you know, something,
Speaker 1: that they're not alone. And so the number of town
Speaker 1: halls and the number of communications that myself and you know,
Speaker 1: our leadership team has done has been significant, and we
Speaker 1: have tried to be transparent. We've tried to communicate whether
Speaker 1: that's what's happening with the business, UM, what's happening with
Speaker 1: you know, our studios or our offices or everything around
Speaker 1: the world. Um. And you know, I think that's that's
Speaker 1: that's been a very big, big factor in this and
Speaker 1: and and lastly, it's not just one thing. You know,
Speaker 1: we have a pandemic, we have a financial um, you
Speaker 1: know challenge, and you know in the United States in particular, Um,
Speaker 1: you know, we have a real issue in terms of racism.
Speaker 1: And you know, what we are going to do as
Speaker 1: a country, and what we're going to do is businesses. Um.
Speaker 1: So again, it's all of these things happening at the
Speaker 1: same time that really require um, you know, your ability
Speaker 1: or the CEO's ability to address them in a very
Speaker 1: humane way. And I think it's really a call the
Speaker 1: moral leadership right now. And what does that moral leadership
Speaker 1: looks like to you? Especially around the racial justice issue
Speaker 1: in the so you know, for me, it's been devastating.
Speaker 1: You know, I've been such a champion of diversity, uh
Speaker 1: my whole career, and it's it's been very emotional and uh,
Speaker 1: you know, I'm very fortunate my c h r Oh
Speaker 1: kim Seymour, who who is a black woman, but she's
Speaker 1: been my partner and the two of us, UM have
Speaker 1: really you know, spent a lot of time saying, you know,
Speaker 1: how are we gonna you know, manage and what are
Speaker 1: we going to do? And we we had had and
Speaker 1: made progress, um around diversity within our company. There's a
Speaker 1: reason we have a diverse board that didn't happen by accident.
Speaker 1: There's a reason we have a diverse executive team. But
Speaker 1: the first thing we did was do a town hall
Speaker 1: UM and said, look, we've made progress, but it's not enough,
Speaker 1: and we need to do more and we need to
Speaker 1: do it better. And we're going to listen um to
Speaker 1: all our black colleagues. Were going to listen, and within
Speaker 1: a matter of days, we're going to come back and
Speaker 1: we're gonna let you know the actions we're taking, because
Speaker 1: what's really important right now is not just statement, it's
Speaker 1: statement and measurable action and accountability. UM. So you know,
Speaker 1: we we do We said what are we going to
Speaker 1: do internally? What are we gonna do externally? Um? So externally,
Speaker 1: we did donate a million dollars to a series of
Speaker 1: nonprofit organizations across you know, education, social justice, health and wellness,
Speaker 1: and we're matching all employee donations to those well, UM,
Speaker 1: we've already hired a head of inclusive leadership. We said
Speaker 1: we would and we already have. UM, so we know
Speaker 1: that there's someone across the organization. UM, we're establishing a
Speaker 1: Black Advisory Group where spotlighting black owned businesses on our
Speaker 1: WW shop, UM, black employee development program, requiring diversity hiring. UM,
Speaker 1: and hey, Mindy, address this issue of disparity, just like
Speaker 1: we have an academic advisory board. We're gonna continue this
Speaker 1: conversation down the line. We love catching up with you,
Speaker 1: Mindy Grossman, CEO of WW International,