- The Washington Times - Tuesday, May 2, 2000

Monica Lewinsky's flirtation with the world of advertising dealt a devastating blow to an ailing company, ad industry professionals said.

The former White House intern was hired to represent Jenny Craig Inc. in an ad campaign saying she had lost 31 pounds through the program. The ads ran for just over a month starting in January before the company pulled them because of the negative public reception.

"Any time you use someone who is controversial in that manner, you usually end up with a big gain or a big loss," said Mark Greenspun, founder and partner at AdWorks in the District of Columbia. "If you are having problems in business, everything you do either contributes to it to make it better, or worse. I don't think this made it any better."

Little over a month before the ads campaign began, the weight-management company announced it closed 86 of its company-owned centers in the United States and reduced the staff at its La Jolla, Calif., headquarters by 15 percent.

In fiscal 1999, Jenny Craig, named after its founder, lost $672,000. And the San Diego Stock Report said that, during the first quarter of the year ended Sept. 30, the weight-loss chain lost $3.8 million, or 18 cents per share, continuing a downward trend that has lasted three years.

Jenny Craig has also been dealing with continuous lawsuits for eight years, and just last week it was advised it no longer meets the New York Stock Exchange's continued-listing standards.

Using Miss Lewinsky as a spokeswoman might have been the last straw, advertising industry professionals say.

"Having just had [the affair with the president], and of going to the media, and her name is all over everything, and for the most part it was negative," said Ron Ordanza, art director at Crosby Marketing in Baltimore. "So it was not a good move to include her in any campaign, especially one that hinges on the weight loss."

Miss Lewinsky's weight worries, among other things, were chronicled in Kenneth Starr's report to Congress during the six-month impeachment process.

In the $7.2 million ad campaign, the former White House intern said she had tried every diet in the world, but nothing worked. She then said the Jenny Craig program helped her lose 31 pounds.

The program is based on the concept of personal consulting: Dieters are advised about what to eat and about how to create an active lifestyle and a balanced life.

Five weeks after the Lewinsky campaign began, it ended. Some Jenny Craig weight-loss franchises refused to run the ads, saying Miss Lewinsky was not an appropriate role model.

"The whole perception that she had a problem with her weight … it was easy for a person like President Clinton, with his stature, to prey upon her because she had a lot of insecurities," said Mr. Ordanza. "And a big problem was her weight. Knowing that magnifies even more the problems of using her as a spokesperson for something weight-loss related."

Miss Lewinsky, 26, also designs handbags and sells them on the Internet and at a Manhattan department store.

Prior to the Lewinsky campaign, Jenny Craig, founded in 1983, had racked up a list of troubles.

In 1990, Miss Craig was named in a class-action suit on behalf of 360,000 California clients who claimed to have been hurt by her diet. The company paid them more than $46 million in cash and merchandise.

Two years later, Jenny Craig shareholders filed a class-action securities lawsuit, saying that when the company went public late in 1991, Miss Craig knew the diet-center market was saturated but still forecast growth, thus misleading investors into thinking business was booming. Although the company denied the charges, it settled the case for $9.5 million.

In 1997, Miss Craig had to settle a complaint by the Federal Trade Commission that her company was guilty of false advertising by making dieters believe they would lose a lot of weight and keep it off for a long time. Jenny Craig Inc. settled after saying it had always warned that results may vary.

Then, last year, the company lost a suit for breaking the lease on its company headquarters in San Diego. It paid more than $8 million in damages to the plaintiff, who rented the building.

As of March 31, Jenny Craig owned 548 weight-loss centers and had another 112 owned by franchisees across the United States, Canada, Australia, New Zealand and Puerto Rico. That's down from 767 centers as of March 31, 1999.

Jenny Craig officials did not return calls yesterday afternoon.

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