Robert Trigaux/Tampa Bay Times – HSN chief executive officer Mindy Grossman, one of the revered names in the retail shopping industry, is leaving the St. Petersburg TV/digital shopping company after 11 years to become president and CEO of Weight Watchers International Inc.
Grossman, 59, will join the diet company in July. Weight Watchers has been in the news often in recent times — ever since media billionaire Oprah Winfrey became a prominent investor and brand ambassador (by losing 40 pounds on its diet). Increased brand visibility hasn’t translated to higher revenue, however. Weight Watchers’ business has struggled in an era of such new technologies as fitness trackers and alternative diet programs and has been looking for fresh leadership.
The HSN executive may find she is trading one set of retail challenges for another set at Weight Watchers. Both HSN, with $3.6 billion in annual revenues, and Weight Watchers, with $1.16 billion, are aging brands in need of rejuvenation.
“I am thrilled to join Weight Watchers and lead the next phase of the company’s transformation,” Grossman said in a statement. “This is a tremendous opportunity to leverage technology and consumer insights to create innovative personal experiences, build loyal communities and accelerate growth. Ultimately, the ability to inspire people to live healthier and happier lives is what excites me both personally and professionally.”
Grossman’s resignation from HSN will be effective on May 24. She will not stand for election to the board of directors. Until then, HSN said Grossman will work with senior management and the board to ensure a smooth transition. HSN has retained a national search firm to assist with the search for a successor that will include both internal and external candidates.
HSN declined to elaborate on its press release. Grossman is known as a creative and aggressive retail leader, trying new ways, products, pitches and technologies to attract shoppers. Among her more notable accomplishments at HSN are the company’s expansion into the entertainment field — most recently collaborating with Disney in selling Beauty and the Beast products — and utilizing the HSN platform to help make technology products more approachable for shoppers.
It was on Grossman’s watch that the biopic movie Joy starring superstar actress Jennifer Lawrence was made about Joy Mangano. The inventor and marketer has sold more than $3 billion worth of home products — most of it on HSN.
Grossman also led orchestrated HSN becoming a public company in August 2008.
For awhile, HSN was on a roll. A CNN story in 2014 carried this headline: “How Mindy Grossman made home shopping hip.”
However, HSN’s financial performance has suffered in recent years. From a recent high of more than $77 a share in early 2015, HSN’s stock closed Wednesday at $36.50. That means HSN’s market value has tumbled to $1.9 billion, half of what it was at its peak price. HSN still faces many challenges with retail stores closing and shopping habits changing rapidly. Over the past year, Grossman herself noted repeatedly how consumers have grown more distracted by so many digital choices and even last year’s combative presidential campaign.
Industry rumors that Grossman might be leaving HSN began to circulate early this year, at the same time that she was named chair of the National Retail Federation in New York. Some veteran retail observers, however, were caught off guard by her latest career move.
“In a sense it surprises me only because Weight Watchers is a strong brand but it doesn’t have the cache (as HSN), obviously because it deals with overweight people, not skinny, sexy people,” said Jeff Green, a Phoenix-based expert on the retail industry.
HSN “has had a rough time, but it’s because people’s shopping patterns have changed,” he said. “Maybe (Grossman’s) idea was, one, to get away from pure retail and, two, to take Weight Watchers in a retail direction that’s not affected by the internet, meaning expanding food products. Weight Watchers has a pretty good selection in grocery stores but I think it could be bigger.”
Shares of Weight Watchers surged 13 percent in after hours trading on news of Grossman becoming its new leader. She is replacing James Chambers, who stepped down in September while the weight-loss program operator struggled to capitalize on its alliance with Winfrey.
Grossman, in a statement, expressed pride in the accomplishments at HSN. “It has been an honor to work with such an inspired team over the past decade as we transformed the business to lead the future of boundary-less retail.”
HSN has 6,000 employees, with 2,500 in St. Petersburg, and ranks among Tampa Bay’s largest public companies. Until a new CEO is found, the company has adopted an “office of the chief executive” whose members will manage day-to-day operations and engage with the board on a regular basis. That office will consist of Rod R. Little, chief financial officer; Bill Brand, chief marketing officer and HSN president, and Judy A. Schmeling, chief operating officer and president of HSN’s Cornerstone Brands catalog business.