WeightWatchers (WW), the renowned weight-loss brand, has filed for Chapter 11 bankruptcy after over six decades of operations in the United States, facing a staggering debt of approximately USD $1.5 billion (AUD $2.3 billion). Despite this development, Australian members have been reassured that their subscriptions and services will remain unchanged as the company navigates its financial restructuring.
In an official statement, WW expressed confidence in its future, declaring, “We’re continuing to operate business as usual… We will come out of this process stronger.” Following the news, WW’s stock price has seen a dramatic decline, plummeting from nearly USD $40 per share in June 2021 to a mere 79 cents, with predictions it may drop to around 34 cents post-bankruptcy announcement.
The company describes its debt situation as “significant,” with some claims dating back several years. However, WW has clarified that this filing does not signify imminent liquidation. Instead, it’s a strategic move to facilitate an orderly restructuring of its financial obligations. “To ensure growth and delivery of innovation, we began engaging with financial advisors to explore debt reduction options,” the company stated.
Competing against newer weight-loss solutions such as Ozempic, WW has faced increasing market pressure. The departure of Oprah Winfrey, who served on WW’s board since 2015 and is often associated with the brand, further compounded its challenges. Winfrey announced her exit last year, stating her desire to discuss various health topics freely, particularly in light of an upcoming special on weight-loss medications.
The company’s struggles continued under former CEO Sima Sistani, whose attempt to shift WW towards a telehealth model fell short, leading to her ousting last year following a AUD $163 million investment that did not yield significant results. WW reported a net loss of AUD $345 million last year, alongside a 5.6 per cent drop in subscription revenue year-on-year.
In conclusion, while WW contends with financial hurdles and stiff competition, it remains committed to maintaining its product and services for existing Australian members. The company aims to emerge from this restructuring phase in a stronger position to continue its legacy of supporting individuals on their weight-loss journeys.
