Jenny Craig to Close Physical Operations and Transition to E-Commerce Model
Jenny Craig, a weight loss and nutrition business that has helped millions of Americans shed pounds over the last four decades, has announced it will be closing its doors. According to internal communications obtained by NBC News, the company will be transitioning from a brick-and-mortar retail business to an e-commerce driven model. The company’s California office received a WARN Act notice last week that Jenny Craig would be closing the office on June 24, but it could close as soon as May 5. Corporate employees received a FAQ stating that the company would wind down physical operations to transition to an e-commerce model.
Jenny Craig has alerted employees to the potential of mass layoffs as it begins “winding down physical operations” and hunts for a buyer, according to NBC News. The company’s executives have told salaried employees that their last day at the company will be Friday, and hourly employees have worked their final shifts on Tuesday. According to records acquired by ABC News, Jenny Craig informed its staff that it is currently “in the process of winding down physical operations, likely transitioning to an e-commerce model.”
As per Bloomberg’s report last week, the organization is presently confronting a debt of around US$250 million and is contemplating seeking financial protection if it neglects to locate a purchaser for its resources. The weight loss industry has been undergoing major changes, with the introduction of popular new prescription diabetes drugs such as Wegovy, Ozempic, and Rybelsus that are being prescribed for weight loss. The core of Jenny Craig’s program is focused on creating weight-loss oriented meals for their clients.
Founded in 1983, Jenny Craig became a household name for its weight loss program, providing special menus designed by chefs and nutritionists to help consumers lose weight. The company recruited celebrities to front the brand, including actors Kirstie Alley, Valerie Bertinelli, and Jason Alexander, and singer-songwriter Mariah Carey. In an email sent to employees on Tuesday, the company said it will close “due to its inability to secure additional financing.”
Jenny Craig’s policy is to provide severance pay to laid-off employees “based on job level and tenure with the company,” according to the FAQ document it sent out last week. The company told employees in the termination letter that they will receive a “final paycheck, including your full compensation earned through your last day of work and all accrued, unused paid time off.”
The closure of Jenny Craig’s doors is the latest sign of major changes in the weight-loss industry, with consumers generally pivoting more toward online services in recent years. The company was acquired by private equity firm H.I.G. An undisclosed amount of capital was invested in 2019. As the weight-loss industry continues to evolve, it remains to be seen how other major players in the industry will adapt to these changes.
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