With its finances thinning out and heavy competition from digital weight loss platforms, weight loss icon Jenny Craig is closing down after 40 years in business.
The weight loss and wellness company was founded by Jenny and Sidney Craig in 1983, with its first locations in Melbourne, Australia. The company opened its first U.S. outlet in 1985 and currently has about 500 weight-loss centers in the U.S. and Canada.
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Now, the company’s physical stores will be no longer, “due to its inability to secure additional financing”, according to NBC News. Jenny Craig said it expects to continue to operate online after pulling the plug on its brick-and-mortar locations.
“Last week, corporate employees at the company’s Carlsbad, California, office received a WARN Act notice that the company would be closing the office June 24, but may close as soon as Friday,” NBC News reported. “For the past two weeks, Jenny Craig had been running out of money as it searched for a buyer. Bloomberg Law reported last month that the company was pursuing a sale.”
Hourly employees' last day was Tuesday, while corporate staff will reportedly be let go on Friday, May 5.
“Like many other companies, we’re currently transitioning from a brick-and-mortar retail business to a customer-friendly, e-commerce-driven model,” a spokesperson told CNN.
Jenny Craig holds $250 million in debts and will reportedly file for bankruptcy if a company sale can’t be completed.
While Jennie Craig centers were a common site in the 1990’s and 2000’s, the on-site weight loss market has shifted, with intense competition coming from new weight loss drugs such as Wegovy, Ozempic, and Rybelsus.
Meanwhile, mobile weight loss apps like WeightWatchers, MyFitnessPal, Noom, and Fitbit have also eaten into industry market share.
“Digital or virtual weight loss is a growing $1.4 billion market,” stated MarketResearch.com. “Technology and increased usage of the Internet have changed the way Americans lose weight, and how they access the services of weight loss companies and experts.”
“New companies and apps for smartphones have entered the market in attempts to “disrupt” long-established players,” the company noted.
