Bankrupt Jenny Craig diet company gets a new owner (2024)

Jenny Craig, the Carlsbad weight loss company that closed its doors more than two months ago, will soon be revived exclusively as an e-commerce business, its new owners announced on Wednesday.

Wellful, a direct-to-consumer health and wellness platform that also owns the well-known Nutrisystem, said that it expects to bring Jenny Craig back in the fall, minus the hundreds of storefront locations across the United States and Canada where customers could come for personal weight loss coaching. Jenny Craig’s pre-packaged meals, though, will still be a part of the brand’s weight loss equation under the new ownership.

“The Jenny Craig brand is a wonderful addition to Wellful’s collection of proven health and wellness brands,” Wellful CEO Brandon Adco*ck said in a statement. “Over the last 40 years, Jenny Craig has been committed to helping people lose weight and live healthier lives, and this acquisition not only reaffirms but strengthens that commitment ... Simply put, consumers come to us to achieve their goals and they expect results. We couldn’t be more excited to bring that same experience to past and future Jenny Craig customers.”

Adco*ck made it clear that the Jenny Craig brand will remain distinct from Nutrisystem, which will be managed separately. He says he is confident that Wellful has the expertise to “get Jenny Craig back on its feet” and to once again provide the company’s “loyal customers” with the familiar Jenny Craig products.

News of the acquisition comes exactly two months after Jenny Craig formally filed for Chapter 7 bankruptcy. A mainstay in the weight loss industry for decades, the company struggled to remain viable in recent years as it faced growing competition and hype about new weight loss drugs.

It described itself as “one of the world’s largest weight loss and weight management companies,” with nearly 500 company-owned and franchised locations in local neighborhoods in the U.S., and Canada, and approximately 600 centers worldwide. In San Diego County, there were five weight loss center locations.

Wellful, a private company, did not disclose the purchase price. However, a purchase agreement filed June 2 in federal bankruptcy court in Delaware indicates an acquisition price of at least $10.5 million, not including any potential liabilities. The language in the agreement states that the buyer will pay $5.5 million to the bankruptcy trustee, plus $5 million to the first priority lender.

At the time of the bankruptcy filing, an initial court filing cited more than 100,000 creditors and liabilities of between $100 million and $500 million.

Wellful’s acquisition includes intellectual property assets, among them trademarks, patents, copyrights, promotional material and trade secrets. Also being acquired are Jenny Craig’s customer lists. Wellful said it will be providing updates on the relaunch of the weight loss regimen via Jenny Craig’s website. It is also reaching out to recent program customers.

In a Q&A provided by Wellful, Adco*ck sought to assure those who relied on the Jenny Craig brand that many things will remain unchanged.

“Wellful will allow customers to access all the things that made Jenny Craig successful and that customers love most — the food, the structure, the program, the coaching — and integrate a sustainable business model,” he said.

Asked about whether the increasing popularity of weight loss drugs threatens the new Jenny Craig model, he answered, “We are watching the role pharmaceuticals play in the industry. People lose weight differently. We are here to support the consumer wherever they are in their weight loss journey, recognizing the importance of learning proper nutrition.”

Jenny Craig, who founded her diet empire in Melbourne, Australia with her late husband Sidney, did not respond Wednesday to requests for comment on the revival of her brand. In an interview with the Union-Tribune in May, she acknowledged her sadness over the news that the Jenny Craig locations would all be closing.

“My heart hurts in knowing how hard we worked for many years in our effort to bring a credible, safe and healthy program to people needing to change their lifestyle in order to shed excess weight,” she said at the time.

The Craigs moved their company to Carlsbad two years after its founding in 1983. Sidney Craig stepped down as the company’s CEO in 2003, and he and his wife later sold all of their shares as part of a buyout by Nestle. Over the years, the Jenny Craig name rose in popularity, thanks in part to TV commercials that featured celebrity spokespeople such as actress Valerie Bertinelli, Seinfeld star Jason Alexander and pop icon Mariah Carey.

The company changed hands a few times over the last decade and a half, with the most recent sale four years ago when H.I.G. Capital, a global private equity investment firm, acquired it for an undisclosed price.

Bankrupt Jenny Craig diet company gets a new owner (2024)


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