Jenny Craig Loses All Its Weight, Confirms Closure After 40 Years: Who Benefits?

Jenny Craig Inc., a once-popular weight loss and nutrition business, announced its closure after 40 years due to an inability to secure additional financing.

The Carlsbad, California-based company, which has operated about 500 company-owned and franchised stores across the U.S. and Canada, was acquired by buyout firm H.I.G. Capital in April 2019 for an undisclosed amount.

Last week, employees at the company’s California office received a WARN Act notice that Jenny Craig would be closing the office on June 24, but could close as soon as May 5.

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Jenny Craig said that it would wind down physical operations to transition to an e-commerce model.

Jenny Craig’s shutter will likely benefit other players in the weight loss and nutrition industry including Herbalife Nutrition Ltd HLF, Nu Skin Enterprises Inc NUS, USANA Health Sciences Inc USNA, Medifast Inc MED, and WW International Inc WW. These companies, which have shifted focus to e-commerce and online services in recent years, could see an increased demand as consumers shift away from physical centers.

Jenny Craig has also had to deal with increased competition from a handful of drugs that can help people lose weight, including Wegovy, Rybelsus, and Ozempic, NBC reported Wednesday.

The company's client-facing operations mostly happened at its physical centers, but consumers generally have been pivoting more towards online services in recent years.

Last week, Bloomberg News reported that the company was considering bankruptcy in an effort to sell assets.

Priot to H.I.G.'s ownership, Switzerland-headquartered Nestle ADR NSRGY purchased Jenny Craig in 2006 for $600 million. It subsequently sold the company’s weight management business to North Castle Partners for an undisclosed sum in 2013.

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