WeightWatchers has filed for bankruptcy in the US amid surging demand for weight-loss drugs like Ozempic and Mounjaro.
The New York-headquartered business founded more than 60 years ago started Chapter 11 bankruptcy proceedings this week, it said.
Chapter 11 is a type of bankruptcy that reorganises a struggling company’s debts to enable it to stay open and become solvent.
Founded in 1963, WeightWatchers has helped millions of people on their weight loss journeys via memberships, diet meals, memberships and books.
It has also enjoyed a string of high-profile celebrity backers over the years. Celebrities like Oprah Winfrey, Lorraine Kelly and Jessica Simpson have all helped market the brand.
WeightWatchers’ parent company, WW International Inc., said it had the support of nearly three-quarters of its creditors to plough ahead with the proceedings.
Bankruptcy filing: WeightWatchers has filed for bankruptcy in the US amid surging demand for weight-loss drugs
The group expects to emerge from bankruptcy within 45 days, if not sooner, it added.
It is aiming to pivot its operations to become a telehealth services provider shifting weight-loss drugs and plans to eliminate its $1.15billion debt pile via the bankruptcy process.
The bankruptcy filing was made in the US Bankruptcy Court for the District of Delaware.
As well as its debt pile, the company also reportedly has more than $1.4billion of loans and bonds due in 2028 and 2029.
The emergence of weight-loss drugs has upended WeightWatchers’ business model, which centred on selling low-calorie foods and diet advice to overweight people.
Swathes of its former customers are turning to a new generation of weight-loss drugs that help them shed pounds with less effort.
In 2023, WeightWatchers moved into the prescription weight-loss drug sector. it snapped up Sequence, now called WeightWatchers Clinic, for $105million.
WeightWatchers Clinic is a telehealth service that helps users get prescriptions for weight-loss drugs like Ozempic, Trulicity and Wegovy.
Amid a turbulent spell for the business, Sima Sistani resigned as WW International’s chief executive in September 2024.
Tara Comonte, a former Shake Shack executive and Weight Watchers board member, was announced as the group’s interim chief executive.
On Tuesday, Comonte, now the firm’s chief executive, said in a statement: ‘As the conversation around weight shifts toward long-term health, our commitment to delivering the most trusted, science-backed and holistic solutions—grounded in community support and lasting results—has never been stronger, or more important.’
Celebrity backing: A string of celebrities including Lorraine Kelly helped WeightWatchers with its marketing campaigns
In demand: Weight-loss drugs like Ozempic have surged in popularity in recent years
In the first quarter, the company’s weight-loss medication and clinical subscriptions arm saw revenue jump 57 per cent year-on-year to $29.5million.
However, WeightWatcher’s total revenue fell 10 per cent in the period, while its adjusted loss reached 47 cents per share.
Shares in WW International Inc. have traded at under $1 since early February. In after-hours trading, the stock fell by half to 39 cents.
Last month, the group’s market value stood at around $11.6million, down from $6.7billion at its peak. By contrast, Ozempic-maker Novo Nordisk is valued at around $2.6trillion.
Alarm bells first rang in March 2023, when the company’s shares hit an all-time low amid dwindling sales.
The situation worsened when long-time investor Winfrey, who admitted to using weight-loss medication, stepped down from the group’s board in February 2024 after nearly a decade in the role.
Lale Akoner, global market analyst at eToro, told This is Money: ‘The rise of GLP-1 drugs has upended the traditional weight-loss industry, and WeightWatchers is the first major casualty.
‘Its bankruptcy is less about mismanagement and more about becoming irrelevant.
‘The company failed to pivot quickly enough in a market that now prefers prescriptions over points. Legacy diet brands are being outpaced by a pharma-driven approach that consumers increasingly trust.
‘WeightWatchers’ downfall highlights a seismic shift: Americans are moving away from old-school diet programs and embracing medical interventions.
‘Traditional names like Jenny Craig have also faltered, and 1 in 8 U.S. adults have now used a GLP-1 drug for weight loss.
‘SlimFast’s parent company reports shrinking supermarket shelf space for diet products, while even gyms are adapting by offering weight-loss injections on-site.
‘This isn’t just a company failure, it’s a wake-up call for the entire wellness sector. Firms still relying on willpower, calorie counting, and decades-old models are at serious risk of becoming obsolete.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .