TrimSpa in trouble after Smith's death

Marketing experts say TrimSpa's close association with its spokeswoman could spell disaster for the business.

By Jessica Dickler, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- The death of sassy spokeswoman Anna Nicole Smith coupled with growing doubts about TrimSpa's controversial weight-loss products may prove too much for the closely held company, marketing experts said Thursday.

"Given the double whammy of who their spokesperson was and the other tangential difficulties, I don't think they're going to come back," said Robert Passikoff, a New York brand consultant.

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Anna Nicole Smith had been a spokeswoman for TrimSpa since 2003.

Passikoff said news that Smith died in Florida Thursday could spell disaster for the small business.

In fact, TrimSpa had suffered from sinking sales figures for the past three years. Right after Smith came on board, TrimSpa sales ballooned 172 percent to $43 million in 2004 from close to $16 million in the year earlier.

But by 2006, sales had shrunk to $19.5 million, according to Information Resources, Inc., a data-tracking firm.

A spokeswoman for TrimSpa said the company did not know if Smith was taking the weight-loss drug, which does not require a prescription, at the time of her death.

Authorities said they retrieved a "large amount" of prescription medicine from Smith's hotel room, according to CNN.

"The company was in trouble with or without Anna Nicole," said a source familiar with the company.

"When you mention TrimSpa, the image that came to mind was Anna Nicole Smith and that's the difficulty with being so closely tied to a celebrity," Passikoff said.

"You've just pulled the rug out from under what the brand was standing on," he added.

The former Playboy Playmate and reality TV star became a spokeswoman for TrimSpa in October 2003, after losing a reported 60 to 70 pounds.

But Smith and TrimSpa have faced repeated legal difficulties over allegations that advertisements for the weight-loss pills were misleading.

"It's a matter of making reasonable and moderate claims that are backed by real substantiation," said Ralph Fucetola, former lawyer for the company.

Last month, the Federal Trade Commission said it fined the marketer of TrimSpa and other over-the-counter diet drugmakers $25 million for false advertising.

The government agency said that the company's weight-control claims were not supported by scientific evidence.

"While TrimSpa disagreed with the FTC it made a business decision by consenting to a $1.5 million payment in order to end the FTC's over two-year investigation," a spokeswoman for TrimSpa told CNNMoney Friday.

The company still contends that its weight-loss drug, along with diet and exercise, can yield successful results.

"TrimSpa has some major challenges given the loss of credibility about their product and [now] losing their spokesperson," said Britt Beemer, the chairman of strategic marketing firm America's Research Group.

"It's a one-two punch and it does damage their marketing position dramatically."

TrimSpa, which is owned by privately held Goen Technologies, is based in Cedar Knolls, N.J.

TrimSpa founder Alex Goen expressed regret at Smith's death.

"Today, Anna Nicole Smith's grief-stricken and tumultuous personal life came to an end. Anna came to our company as a customer, but she departs it as a friend," Goen said in a brief statement.

"While life for Anna Nicole was not easy these past few months, she held dear her husband, Howard K. Stern, her daughter, Dannielynn Hope, her most cherished friends, beloved dogs, and finally, her work with TrimSpa," he said.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.