Jenny Craig is going out of business

By Jordan Valinsky, CNN

Jenny Craig, the weight-loss chain, has confirmed that it’s shutting down for good.

“It’s with a heavy heart, we’re announcing the close of our business,” a note on its Facebook page late Thursday. “The last 40 years would not have been possible without you.”

Uncertainty surrounding its future started last week on reports that the company was alerting employees of layoffs and “winding down physical operations” of its nearly 500 weight-loss centers in the United States and Canada. Roughly 1,000 people will be out of a job, according to NBC News.

Jenny Craig hasn’t returned CNN’s request for comment. However, its website is no longer active and displays the same message from its Facebook page.

Customers are being told that “all auto-delivery subscriptions have been canceled” and that “all coaching sessions, food orders and merchandise sales have ceased online and in corporate centers.”

Jenny Craig’s program provided nutritionally balanced menus, including entrees, desserts and snacks, designed to help people lose weight. Bloomberg reported last week that the company has roughly $250 million of debt and is considering a bankruptcy filing if efforts to find a buyer for its assets failed.

Named after its founder, the Jenny Craig business started when she couldn’t lose weight after giving birth to her second child. According to its website, she said working out at the gym alone “doesn’t lead to long-term weight loss.” She opened the first branded weight-loss center in 1983.

Her advertisements were splashed all over the TV, featuring well-known celebrities like Valerie Bertinelli, Mariah Carey and Kirstie Alley. But there was controversy when the brand enlisted Monica Lewinsky for an ad. Craig told Larry King in 2001 that featuring her was a mistake.

“She certainly lost weight, but unfortunately, people tended to focus more on who she was rather than her success on the program,” Craig said on “Larry King Live” about the Lewinsky ad.

Competition from drugs

It’s the latest sign of major changes in the weight-loss industry, brought on by popular new prescription diabetes drugs such as Wegovy, Ozempic, and Rybelsus that can also be used to help people lose weight. These relatively new drugs work by stimulating the release of insulin, which helps lower blood sugar. They also slow the passage of food through the gut.

The FDA approved Ozempic for the management of diabetes in 2017 and Wegovy for weight loss in 2021. Traditional weight-loss companies are scrambling to adjust.

WeightWatchers, for example, is getting into the prescription weight-loss drug business. The company, now known as WW International, recently bought Sequence, a telehealth subscription service that connects patients with doctors who can prescribe weight-loss and diabetes drugs. The $106 million acquisition of Sequence will give WW a foothold into the growing market for prescription drugs to manage weight loss.

Ozempic has gained popularity in part due to celebrities using it for weight loss. But there are many concerns with using diabetes drugs for weight loss, including high costs and shortages that are making it harder for people with diabetes to obtain the drugs.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

CNN’s Nathaniel Meyersohn contributed to this report.