WeightWatchers files for bankruptcy as it desperately tries to survive Ozempic
The global weight loss firm has filed for bankruptcy protection in the US to eliminate debts of £860.6million.
WeightWatchers is filing for Chapter 11 bankruptcy protection in the United States to eliminate £860.6million ($1.15billion) in debt and focus on its transition plans. Parent company, WW International Inc., said it had the support of nearly three-quarters of its debt holders and expects to emerge from bankruptcy within 45 days if not sooner.
WeightWatchers was founded more than 60 years ago but has struggled recently. In 2023, the company moved into the prescription drug weight loss business — particularly with the £79.3m ($106m) acquisition of Sequence. It is now WeightWatchers Clinic, a telehealth service which helps users get prescriptions for drugs such as Ozempic, Wegovy and Trulicity.
A company spokesperson said: "WeightWatchers took strategic action to eliminate approximately $1.15billion in debt, significantly strengthening its financial foundation to further invest in its growth strategy and better serve its millions of members around the world.
"WeightWatchers remains business as usual. There will be no impact to members or the plans they rely on to support their weight management goals. All offerings and services, including workshops, the app, and access to telehealth services, will continue to operate as usual, with no interruptions."
In its latest earnings report published on Tuesday (May 6) showed first-quarter revenue declined 10% while its loss on an adjusted basis totalled 35p (47 cents) per share.
However, clinical subscription revenue — or weight-loss medications — jumped 57% year on year to £22m ($29.5m).
In September, WW International CEO Sima Sistani resigned and the New York company named Tara Comonte, a WeightWatchers board member and former Shake Shack executive, interim chief executive.
Ms Comonte, who is now CEO, said: "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."
Shares in the company have traded under 75p ($1) since early February. In after-hours trading, the stock plunged to 29p (39 cents).
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The bankruptcy filing was made in US Bankruptcy Court for the District of Delaware.
WeightWatchers, which rebranded as WW in 2018, began in 1963 and went on to grow into a multi-million pound global business.
Its points system has been followed by millions, with weekly weigh-ins and group meetings aimed at motivating members to follow a low-calorie diet to shed the pounds.
But transformations in the diet industry, including the development of injections linked to weight loss, have spelt trouble for WW and others.
Pharmaceutical firm Eli Lilly revealed in April that it is poised to bring the first daily weight-loss pill to the UK after trails showed it can help people lose weight and control type 2 diabetes.
