There’s a reason consumers continued to spend money on apparel and beauty, even in the midst of a pandemic lockdown.
It’s human nature to care about how we look and feel. That tendency has allowed the beauty and wellness industries to thrive these past few years, even as inflation has forced consumers to cut back on spending broadly.
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The lure of being able to lose weight has also been a huge draw for consumers.
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While some people put on pandemic pounds in 2020, others embraced the lockdowns as an opportunity to get fit by starting exercise routines and focusing on healthy cooking.
And in the years since, there’s been a lot of focus on maintaining healthy habits, whether in the context of dining or exercise.
Iconic retail food brand files for bankruptcy.
Image source: Bloomberg/Getty Images
A shakeup in the weight-loss industry
For a long time, it seemed like weight management and wellness companies were unlikely to run out of customers. At any given point, there was apt to be someone who was looking to shed a few pounds or get into better shape for summer or a specific occasion.
But the increasing availability of GLP-1 drugs like Ozempic and Wegovy has impacted the weight-loss and wellness industry, and not necessarily in a good way.
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Now that it’s easier to lose weight through medicine, consumers may be less likely to embrace weight-loss programs that focus on diet and nutrition. Why sign up for a program when a drug can do the job much faster?
WeightWatchers tried its best to adapt to these changing times. But like its competitors, the company has struggled in the face of medical weight-loss intervention.
WeightWatchers files for bankruptcy, aims to change business model
WeightWatchers is famous for its frozen meals and points-based weight-loss system.
For years, the company promoted a slow and steady approach to weight loss and management, focusing on aspects like portion control and savvy dietary choices to meet health-related goals.
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But the introduction of GLP-1 drugs forced WeightWatchers to pivot. The company moved into the prescription weight-loss space in 2023 and introduced a telehealth service whose aim is to get members access to drugs like Ozempic.
Still, that wasn’t enough for WeightWatchers to thrive. On May 6, the company announced it was filing for Chapter 11 bankruptcy in an attempt to reorganize.
The goal is for WeightWatchers to “bolster its financial position, increase investment flexibility in its strategic growth initiatives, and better serve its millions of members around the world.”
As part of the bankruptcy process, WeightWatchers is seeking to eliminate $1.15 billion in debt so it can focus on its transformation plan, which includes upgrading its digital and member experience and accelerating the expansion of its telehealth business.
The company plans to continue operating during the bankruptcy process and expects no disruptions to members.
“For more than 62 years, WeightWatchers has empowered millions of members to make informed, healthy choices, staying resilient as trends have come and gone,” said Tara Comonte, chief executive officer of WeightWatchers. “The decisive actions we’re taking today, with the overwhelming support of our lenders and noteholders, will give us the flexibility to accelerate innovation, reinvest in our members, and lead with authority in a rapidly evolving weight management landscape.”
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The question, though, is whether the company can thrive in an age when customers can get a prescription from a doctor, instead of relying on weight-loss support programs to shed pounds.
WeightWatchers carved out a name for itself as a comprehensive weight management service. But given how easy it’s become to get a prescription for weight-loss drugs, consumers may not feel a need for all that support.
Filing for bankruptcy might help WeightWatchers reduce debt and reorganize its finances. But the big question is whether it can retain customers for the long haul.
