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EXPLORE FURTHER: The insider tale of how Ozempic wreaked havoc on the weight loss business
WeightWatchers has ultimately declared bankruptcy following several months of discussions with its creditors.
The weight management firm has been
struggling under $1.6 billion of debt
following the decline in their market share due to the emergence of newer weight loss medications like Ozempic and Wegovy.
The company, now known as WW, has already negotiated a deal with its creditors so will enter Chapter 11 bankruptcy with a pre-packaged filing.
This will enable the firm to exit bankruptcy swiftly while maintaining regular operations throughout the transition.
Following the surge in popularity of Ozempic and similar medications, WW announced plans to increase investment in its own clinical division. This move aims to provide clients with a pharmaceutical option for quicker weight loss, as mentioned in their official documents.
Nevertheless, CEO Tara Comonte stated that the company isn’t abandoning its traditional operations altogether.
centered on offering low-calorie food options, along with diet and fitness guidance for individuals who are overweight
.
Weight Watchers was established in 1963 by Jean Nidetch, a homemaker from Queens, New York.
Everything started in her kitchen when she gathered a circle of friends to discuss their diets and provide mutual encouragement.
Back then, Jean was adhering to a diet outlined by the New York City Board of Health, yet she understood that having support and being accountable were crucial factors. The institution’s investors, who hold its debts, will assume control of the company.
The firm has impacted countless individuals across the United States and globally, offering diet food, magazines, books, and access to its weight loss plans.
Throughout the years, celebrities such as Oprah Winfrey and Jessica Simpson have contributed to promoting the brand. In 2014,
Simpson showed up in advertisements when he was 33 years old.
, showcasing her slim figure after giving birth in a tight black dress.
Alarm bells first rang in March 2023, when shares hit an all-time low amid declining sales. The situation worsened when longtime investor Winfrey — who admitted to using weight-loss medication —
stepped down from the board
.
Ever since, the stock has kept falling.
On Wednesday, WW’s market value stood at just $63.4 million — a shadow of its $6.7 billion peak.
In contrast, Novo Nordisk, which produces Ozempic, has a valuation of approximately $297 billion.
In the previous month, WW utilized the leftover $121 million from an initial $175 million loan scheduled to be due in April 2026. According to company leaders, this move aimed at enhancing their financial flexibility instead of covering urgent expenses.
In addition to the $175 million debt scheduled for repayment next year, the firm also faces over $1.4 billion in loans and bonds maturing in both 2028 and 2029.
When the acquisition takes place, WW’s shares will mostly vanish; however, current shareholders will keep hold of 9% ownership, as reported by The Wall Street Journal. This transaction aims to reduce the firm’s liabilities by approximately $1 billion.
Both WW and its lenders chose not to provide comments for the record when contacted by .
Companies such as Novo Nordisk and Eli Lilly, which operate in the pharmaceutical sector,
took the world by storm last year
with a new generation of so-called GLP-1 diet products – Ozempic, Wegovy and Zepbound.
The medications proved highly effective and quickly gained popularity among Americans and people worldwide who aimed to shed pounds.
Ozempic has already been blamed for the demise of another legacy diet brand.
Jenny Craig, renowned since its introduction in the 1980s, has become a familiar brand name.
In May 2023, it was announced that they would be closing down.
after drowning in debt.
In an effort to rival companies like Ozempic, WW unveiled its own weight-loss injection last year.
This decision was seen as unexpected for a firm that has achieved worldwide success based on the idea that disciplined portion control and strong resolve are essential for long-term health goals.
weight loss
.
Nevertheless, this change has failed to bring about the desired improvement — as seen with WW
chief executive Sima Sistani stepping down
after two years at the helm.
During Sistani’s tenure, WeightWatchers acquired the telehealth platform Sequence, now known as WeightWatchers Clinic, expanding into obesity drug prescriptions.
Tara Comonte, the board member set to temporarily oversee the group until a new leader is appointed, stated: “I am confident that our current team is well-equipped and aligned with the appropriate strategies aimed at fostering growth.”
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