• by Thom Forbes  @tforbes, September 13, 2016

Weight Watcher International CEO James Chambers is leaving the company at the end of the month as its shares drop, competition gains and the “Oprah Effect” flattens out — which is not to say that he didn’t have his successes. 

“Under Jim's leadership we returned to member recruitment growth, transformed our technology platform, and introduced the new holistic Beyond the Scale program that we believe has great potential,” board chairman Ray Debbane said in a statement in a news release. 

Not to mention having Oprah Winfrey join the board during his watch.

“Winfrey, who held a roughly 15% stake as of March, has been closely involved in Weight Watchers,” write Ellen Byron and Joann S. Lublin for the Wall Street Journal. “She spoke regularly with Mr. Chambers, about once a week or so, discussing marketing and program details and sometimes about their personal experiences trying to lose weight on the company’s eating plan.”

She was said to be shooting a movie and not available for comment yesterday but “you can expect Oprah to have a say on who moves into the corner office,” writes Lauren Gensler for Forbes, and her “association with the brand has certainly provided a welcome jolt to the stock. When Winfrey first announced her investment, shares soared more than 90% and created $70 million in paper gains in one day. The stock jumped 19% [in January] after she tweeted that she had lost 26 pounds through the program.”

But when it was announced that quarterly revenue was off 21% in late February, the stock dropped 27% in extended trading. After the announcement yesterday, Weight Watchers shares were down about 4.4% to $9.90 in after-hours trading, Wallace Witkowski reports for MarketWatch, after initially plunging as much as 8%.

“Back in October 2015, Winfrey bought a 10% stake in the company, or nearly 6.4 million shares, for $43 million. So, even with Monday’s pullback in shares, Winfrey is still about $20.2 million ahead on her initial investment,” Witkowski writes. “Winfrey also got vested options and a board seat out of the deal.” 

As the company looks for a new leader, CFO Nicholas Hotchkin and two directors, Christopher Sobecki and Thilo Semmelbauer, will form an interim office of the CEO, according to the release announcing the changes. Semmelbauer, who was part of the founding team of WeightWatchers.com from 2000-2004 and was its COO from 2007-2008, is newly elected to the board. From 2010 to 2015, he was president and COO of Shutterstock, which licenses stock photos, images, videos and music.

No one from inside the company, including Winfrey, is considered a candidate to replace Chambers. 

The company’s stock has dropped 54% this year and the company also reported a loss for its last financial quarter, Jackie Wattles reports for CNNMoney. The recent struggles of the once-dominant weight-management system “have largely been attributed to challenges the company faces from Nutrisystem and an onslaught of free apps and Web sites aimed at helping people manage their weight,” she writes.

“Consumers' embrace of calorie-counting apps on mobile phones, and the popularity of wearable fitness trackers such as those made by Fitbit Inc. have also made it hard for Weight Watchers to stand out, particularly among younger people, analysts said,” Reuters’ Tom Polansek reports. “Morningstar analyst R.J. Hottovy said in a note last month that ‘it will take more time and other technology, product development, and potential rebranding investments to make Weight Watchers’ platform stand out from emergent rivals.’” 

“I am proud of the team's accomplishments in returning the company to growth through the successful launch of Beyond the Scale and our long-term partnership with Oprah Winfrey,” Chambers, 58, said yesterday. 

The Wharton graduate is a consumer packaged goods veteran who served as president of U.S. snacks & confectionary at Kraft Foods North America and president & CEO at North America Cadbury.

“I am confident that Weight Watchers has the right strategies to play a major role in helping to inspire and guide the healthier choices that transform people's lives,” he concluded, earning points for graciousness as the recruitment calls begin.