Jenny Craig Australia and New Zealand has entered voluntary administration, less than a week after saying it would continue its local operations in the wake of the United States business filing for bankruptcy.
Employees of Jenny Craig Australia and New Zealand were informed the business had been placed into voluntary administration on Tuesday, after a company-wide town hall meeting was held, followed by a staff-wide email and a "frequently asked questions" document prepared by administrators, seen by the ABC.
FTI Consulting has been appointed as voluntary administrators of the business, led by Vaughan Strawbridge, Kate Warwick and Joseph Hansell, effective Tuesday, May 9.
The FAQ document states that "the appointment to the Australian and New Zealand companies is intended to seek a restructuring of the those businesses and avoid the same fate as the US business", which is filing for bankruptcy.
Jenny Craig's operations in Australia and New Zealand are separate to those that operate in the US.
In a statement, FTI Consulting said management of the local business appointed administrators after the US business filed for bankruptcy and failed to repay a loan.
"Despite undertakings to do so, [this] has resulted in the directors of the Australian and New Zealand companies needing to appoint voluntary administrator," it said.
Jenny Craig operates more than 80 "weight management" centres globally and employs hundreds of staff.
Internal documentation seen by the ABC said staff will remain employed by the company "while we undertake an assessment of the financial position and options for the businesses".
The document noted that wages would continue to be paid by the administrators.
Administrator Vaughan Strawbridge said the development for the local business was "unfortunate".
"It is unfortunate where an overseas parent company enters bankruptcy and impacts the local business, in particular, where they are operated independently to each other," he said in a statement.
"We are working with the Australian and New Zealand leadership team to trade the business with a view to attracting new capital to restructure the Australian and New Zealand companies.
"Interest has already been received and we will be working with those parties and stakeholders of the business to secure the ongoing business and provide clarity to its loyal and committed staff and customers as soon as possible."
Last week the US business announced it would shut its doors after it ran out of money while searching for a buyer for a fortnight.
Jenny Craig in the US was acquired by HIG Capital in 2019 for an undisclosed amount.
Jenny Craig was first founded in Melbourne by American couple Jenny and Sidney Craig in 1983, before expanding to the US in 1985.
The weight-loss empire provides pre-prepared meals, snacks, and weight loss coaching, and has recruited a number of high profile ambassadors since its inception, including Magda Szubanski and Casey Donovan.
Jenny Craig Australia and New Zealand was contacted for comment but directed the ABC to comments made by the administrator.
