WW International CEO on COVID-19 Impact

so thrilled to be here. I hope you and Jason are both terrific. We've been up here um since March sixteenth, so been uh certainly I think a surreal time for everyone. But we're doing well. Um. To your point, Carol, you know, we entered the year with unbelievable momentum. You know, we had launched my w W, We were in the throes

of our digital transformation. We did a nine city tour with Oprah, touching you know, a hundred and thirty five thousand people, and you know, then all of a sudden mid March, um, the world changed and we had to quickly pivot. Um not only for the safety and security of our employees and our members, but it was important to us that we kept our community together because of our approximately five million members who are all digital, per

cent of them also attended our studios. So in March, in six days, we had to train fourteen thousand coaches. We pivoted our whole products and tech team, and simultaneously in twelve countries we launched UH virtual workshops, which in the first week we had fifteen thousand and they're still

continuing today. UM. And that pivot for us, even though we saw suppressed UM you know subscribe option starting in you know, mid March, that started really picking up again UH starting in mid April, and you know now our digital subscribers are at an all time high, as is our retention. And it was our maniacal focus on not losing our community in a world where community and motivation and support are really more important than ever, just even

psychologically for people. UM. We also took the learnings from the tour we did physically with OPRAH and said, what can we do for people who need this now more than ever, And we launched the four week every Saturday virtual tour with OPRAH and made the decision to make it free globally for everyone, because it's really what people needed right now. And that's what our brand has stood for since the very beginning. And we had just in the first one over half a million people live and

we've now had millions of people watched the content. UM. So what we've been trying to do is use this as an opportunity to accelerate our digital transformation, UM, reduce our real estate fookprint, be able to add, you know, to the ecosystem of wellness. And you know, I think now we're seeing more than ever health and wellness is on top of everybody's mind. It's not a luxury anymore. It's a necessity. And so talk about Mindy and I

believe we've talked about this before. You've mentioned here a couple of times, the Oprah effect here, I mean, what has she done for the brand, especially in this time it feels almost more important to have that voice for a variety of reasons. Yeah, you know, she has been such a partner to me since, you know, the day I joined the company, certainly as a board member, but also as a thought partner in how can we work together to really give people the tools and the motivation

so they can really live their best, healthiest lives. So you know, if you look at what we've built out in terms of this wellness ecosystem, whether it's nutrition or activity or mindset, motivation, sleep, relationships, whatever, that is having Oprah and her voice to be able to amplify, and it's really her superpower is to galvanize people. And we really saw it on the tour and we also saw it on his virtual tour, and I know she feels UM now more than ever. What we bring UM is

going to be more critical for people. And you know, as we talked about moving into the broader scope of wellness, we said, we're never going to abdicate our global leadership in healthy weight loss, which is so important. If you look at the number one factor in COVID deaths with obesity, diabetes is a huge factor. And we're seeing from all our data in terms of why people are joining UM and what is that what is top of mine? It's I need to be healthy, not just for me, but

healthy to others. I need to not get sick to get healthy. I need to prevent what is happening. And I think you know, COVID has really changed the mindset. The other thing it's done, though, it's really identified the health disparities amongst communities, and I think that's going to

be a big focus as well. We've we've had these conversations Mandy with a lot of the members of the medical community that we've had on air about you know, this is obviously a healthcare crisis, but it also speaks to the health of so many different you know, so many Americans and the difficult spot that they're in. One thing I wanted to ask you is, in terms of what you guys have seen, Um, the pivot to even more digital because of the shutdown is the virus potentially

the catalyst. Are finally moving to a digital only model. Look, I think any company that has not used this as an opportunity to accelerate the digital transformation is going to be left behind. That's the reality. However, the way we feel is it's not like face to face will go

away completely. Um, we will have a smaller footprint. But even before COVID, we had a new product that is going to launch later this year, which is Digital plus virtual group coaching, So our digital platform, but more support in terms of coach motivation so once we launch that, we will have a suite of tools that people can

look at and decide what is right for them. It's kind of picking my WW and we've been on this personalization journey, so not only do people obviously take an assessment for what program they want to be on for health and weight loss, but now they're going to have a suite of options in terms of what they feel is right for them. We we just started opening reopening our studios and by the end of this month we will have about four hundred studios open. And we started

obviously safety and security. It started with people could come in and have a one on one session with their coach um Way and they could buy products. But by the end of the month we will have very strategic, smaller groups based on the size and based on the

rules of whatever the location is. UM But we are really seeing that there are people who feel that they want that accountability, that interaction and that motivation, and then there are other people who really just want the support of their digital community UM and you know Connect, which is our digital social platform UM. We also launched Connect groups for people who were going through specific struggles right now,

Young moms imagine college students. A lot of them don't even know if they can go back to school or not. So what we're trying to do is give people that support and community no matter where they are, no matter how they want to interact. We're going to continue our conversation with Mandy Grossmen now and so, Mandy, I I mean, I do wonder in terms of your workforce, how has that gone in terms of letting people go bringing them back.

What's been the rhythm of that and the financial implications, especially as you talk about this sort of hybrid model going forward. Help us understand the workforce here. Yeah, Well, what we had to do is we had to take a very very hard look at our physical footprint around the world, and to give you a perspective, we have locations that are branded owned and operated, and then we also have locations that are in other non owned and clearly right now, those are ones we can't necessarily control

and the safety securities that are number one. Number two, we've obviously seen the ramp up significantly of our digital recruitment. So we did an entire review and we made the decision to reduce our footprint, which unfortunately had to make the difficult decision to shrink a number of our field organization and you know it, it's always difficult to do that, but UM, for the future of where our company is going and where we need to put the investment, that

was the right thing to do. UM. And so of the four hundred studios in the US that will be opened by the end of the month, those are WW studios is the worst over mindy when it comes to cutting costs, letting workers go. I'm just curious about the visibility you feel feel like you have. We've we've got our big invest conference going on, and you hear different things about people not still sure about how tricky it's going to be, you know, as we reopen more. Yeah. Look, UM,

you know, I tend to be a resilient optimist. And of course we've had to do a lot of different modeling. UM. You know. But last week, UM, when we announced the amendment to our revolving credit facility, just to give us more flexibility. We also gave an update on our business performance UM, which, as I said, particularly since mid April,

are digital subscriber growth has been very strong. So you know, at the end of first quarter we were at five million subscribers you normally see a dip from there, but we're still over four point nine and our retentions at an all time high, so it's not like we're not being cautious. We could do an expense reduction of about a hundred million dollars um to make sure that, um, you know, we had contingencies and we were going to have the right liquidity, um, you know, but there's still uncertainty.

There's uncertainty if we have a big spike. UM. So I think, you know, our focus is doing all the right things for the business, to continue to focus on our virtual workshops and digital recruitment, but more important really being more of a necessity for people right now, um, you know, and as this is on top of their mind, and you know, just since um you know, covid and obviously these were in the plan. We launched hydration tracking,

sleep tracking, live content within our app. Across our verticals, we integrated uh fit on, which is video fitness. We now have a full suite of video fitness classes, an extensive sweet in addition to audio fitness and headspace. Um. So really, what we've also done is we did a massive pivot around all our content because you know, again, we have almost five million people on our app tracking and mean I could tell you on a week to week basis of different things that people are eating and

has working out. Also what they're talking about. Well, that's what they think. That's really important and you have to have the relevant content for them. Well that's so true, and it's really fascinating that you are constantly and it makes sense, you know, tracking it to see what people want. You have to write what consumer changes are you seeing because we really feel like there's been some shifts and maybe what consumers want overall, how they're doing things as

they've been stuck home. Yeah. So I think at a very high level, as I said earlier, this idea of you know, wellness going from being a luxury doing a stetsy and people really taking um, you know, evaluation of themselves and their life. And I think, um, there's going to be a real reappraisal of how people live, how they work, how they spend, and what they value um And I think that's going to be uh really important.

The other thing that we see is it used to be you know, people wanted to fix something when it was broken. Right. I get sick. I need something to help me get well. I think now it's I want to be well so I don't get sick. And that's a big mindset change. You know, people, you don't want to be vulnerable. The other thing, UM we're seeing is I think the mental stress that this is really created for people that's not going away overnight, so you know, mental health and a lot of content UM in that

area I think is really going to be important. UM. And then the power of trust and community. UM. You know, I think uh, you know, people UM, in in times of uncertainty, they want to gravitate towards those brands that they trust. And certainly for us, UM, you know, everything we do is science base. UM. It's been that way from the beginning. There's a community and so our entire

organization has really been very focused on serving versus selling. Really, UM, you know, how can we do you know, whatever we can to you know, enhance lives. I think the other thing that's been important is, you know, I think consumers are looking for brands that they really feel have purpose. And you know, I've always been a firm believer that you know, today brands that can marry technology plus meaning

to help people with better connected lives. That's going to be important, and there's going to be a different measurement from consumers when they look at brand and you know, how they managed through this and how they were thinking ultimately of you know who they serve. UM. So maybe I gotta ask you, because Carol and I both know you pretty well. We've watched your career, and I wonder you've managed through all sorts of crises before. What's different

about this one? From a leadership perspective and from the CEO seat? Yeah. You know, I thought when I took my last company public in August two thousand and eight, that was kind of going to be the biggest crisis I would have UM throve through. UM, this has been. This has been very different. UM. Number one, this is truly global. UM. You know. Number two, there's an aspect of uncertainty that we've never had before. UM. You know number three, it has made us all isolate in a

very different way. UM. And all of those things you know, you have to take in from a leadership UH perspective and right now and you know, not that it wasn't then, but the need to a communicate. I'm not just the CEO, I'm the chief communication officer, the chief crisis officer, the chief hope officer. What people are needing and feeling right now, UM is they they want to know, you know, where

they stand, what is happening at any given time. And you know, my feeling is control what you can control, O people, what you're doing, Galvanize them around what you can do, UM, and and keep that focus. And I'm very fortunate that you know, our leadership team has really come together. I mean, we've we've built a culture of purpose and they're galvanized around how what we can do, and I'm galvanized around what we can do for them and for other I think the other thing that's different

this time is the world has changed since then. And UM, authenticity is really important. I say that, you know, people used to think vulnerability was a weakness. It's a strength. UM. People want to understand if they're feeling, you know, something, that they're not alone. And so the number of town halls and the number of communications that myself and you know, our leadership team has done has been significant, and we

have tried to be transparent. We've tried to communicate whether that's what's happening with the business, UM, what's happening with you know, our studios or our offices or everything around the world. Um. And you know, I think that's that's that's been a very big, big factor in this and

and and lastly, it's not just one thing. You know, we have a pandemic, we have a financial um, you know challenge, and you know in the United States in particular, Um, you know, we have a real issue in terms of racism. And you know, what we are going to do as a country, and what we're going to do is businesses. Um. So again, it's all of these things happening at the same time that really require um, you know, your ability or the CEO's ability to address them in a very

humane way. And I think it's really a call the moral leadership right now. And what does that moral leadership looks like to you? Especially around the racial justice issue in the so you know, for me, it's been devastating.

You know, I've been such a champion of diversity, uh my whole career, and it's it's been very emotional and uh, you know, I'm very fortunate my c h r Oh kim Seymour, who who is a black woman, but she's been my partner and the two of us, UM have really you know, spent a lot of time saying, you know, how are we gonna you know, manage and what are we going to do? And we we had had and

made progress, um around diversity within our company. There's a reason we have a diverse board that didn't happen by accident. There's a reason we have a diverse executive team. But the first thing we did was do a town hall UM and said, look, we've made progress, but it's not enough, and we need to do more and we need to do it better. And we're going to listen um to

all our black colleagues. Were going to listen, and within a matter of days, we're going to come back and we're gonna let you know the actions we're taking, because what's really important right now is not just statement, it's statement and measurable action and accountability. UM. So you know, we we do We said what are we going to

do internally? What are we gonna do externally? Um? So externally, we did donate a million dollars to a series of nonprofit organizations across you know, education, social justice, health and wellness, and we're matching all employee donations to those well, UM, we've already hired a head of inclusive leadership. We said we would and we already have. UM, so we know

that there's someone across the organization. UM, we're establishing a Black Advisory Group where spotlighting black owned businesses on our WW shop, UM, black employee development program, requiring diversity hiring. UM, and hey, Mindy, address this issue of disparity, just like we have an academic advisory board. We're gonna continue this conversation down the line. We love catching up with you, Mindy Grossman, CEO of WW International,