Weight Watchers, the 62-year-old well being and wellness firm that formed how thousands and thousands of individuals strategy food regimen and train, filed for Chapter 11 chapter on Tuesday in an effort to scale back its debt by greater than $1 billion, in keeping with The New York Times. The report acknowledged how the corporate plans to proceed working whereas it expands its telehealth enterprise. Beneath the chapter plan filed in Delaware, Weight Watchers will probably be taken over by a bunch of traders whereas present shareholders will retain a 9 p.c stake as soon as the method is accomplished in about 45 days.
The corporate has struggled to keep up its buyer base as individuals more and more flip to weight-loss medicines, health apps, and social media influencers for steerage. “These adjustments will give us the flexibleness to speed up innovation, reinvest in our members, and lead with authority in a quickly evolving weight administration panorama,” Tara Comonte, Weight Watchers’ chief government, stated in an announcement to the New York Instances. Based in New York Metropolis by Jean Nidetch, who had misplaced 72 kilos by following a strict food regimen with help from mates, Weight Watchers initially charged dieters to attend periodic conferences the place they tracked their meals consumption and motivated one another.
The bankruptcy submitting comes as the corporate’s providers for members will proceed uninterrupted, CBS News reviews in its protection of the event that marks a big turning level for a weight reduction program with a historical past spanning over six a long time. Weight Watchers has advanced significantly from its origins, including train regimens and some extent system for quantifying acceptable meals parts, and lately shifting to digital choices via its cellular app and web site.
The corporate has confronted a number of challenges lately, together with a $1.5 million penalty in 2022 as a part of a settlement with the Federal Commerce Fee, which had alleged that its weight-loss app for youngsters illegally collected private info from minors. In keeping with CBS Information, many pediatricians criticized the app, warning that weight-loss packages for youngsters may result in consuming problems. The corporate’s newest earnings report, launched Tuesday, confirmed that whereas income from its scientific enterprise, together with prescribed drugs, had grown 57 p.c year-on-year, its general first-quarter income had declined by 10 p.c; CBS Information reviews that this highlights the corporate’s battle to adapt to altering market situations.
Weight Watchers’ chapter submitting represents an try to regulate to a future the place chemically induced weight reduction has develop into more and more prevalent, The Wall Street Journal reviews, noting that the corporate has been providing medication as a complement to its legacy enterprise mannequin however hasn’t grown quick sufficient to offset declining subscriptions. The corporate’s inventory will probably be largely worn out as the brand new possession group takes management, although present shareholders will retain that 9% stake underneath the restructuring plan that can lower its debt by roughly $1 billion. The Wall Road Journal explains that Weight Watchers has additionally struggled with the arrival of free health apps and recommendation from social-media influencers, which have offered different channels for girls in search of weight-loss steerage.
WeightWatchers entered the scientific prescription enterprise in 2023 by buying Sequence, a telehealth portal that enabled the corporate to supply weight-loss medication to its members. Nonetheless, the Wall Road Journal reviews that former longtime WeightWatchers member Naomi Nemtzow expressed disappointment when the corporate abruptly stopped weekly conferences in her Brooklyn group in 2023, saying, “Principally, they gave up on the form of work that they had been doing and went on to promoting Ozempic.
They jumped on that bandwagon.” CEO Comonte informed the Wall Road Journal that group stays central to the corporate’s model and worth proposition, acknowledging that “this a part of the enterprise has been uncared for and wishes some funding,” whereas emphasizing that “nearly all of our members don’t need to be on these medicines for all times.”
