WeightWatchers has long been a household name, enhanced by celebrity endorsements from Oprah Winfrey and Jennifer Hudson. Jean Nidetch founded New York City company In the early 1960s, her apartment grew up among more than 4 million members worldwide. From those humble roots, the company has grown to help people track meals through apps and provide live coaching and group support. Recently, it has moved to clinical support by obtaining sequences from telemedicine companies, which allows it to provide weight loss medication.
But last week, Weightlifter Observer filed for Chapter 11 bankruptcy. $1.15 billion in debt was eliminated from the company’s balance sheet.
Why?
“The most important thing is that their brand and 60 years of history are role models that new players reject in the market, and they can only do a lot to solve this problem,” said Michael Schnell, health consultant West Monroe Health Care M&A Director. “It’s like trying to attract Netflix blockbusters by going into streaming – consumers have moved on and it’s hard to change decades of market perception.”
In other words, it cannot adapt quickly enough to the rapidly changing weight loss environment stimulated by the growing popularity of GLP-1.
What caused this?
A WeightWatchers spokesman said the company’s loss of debt and the $100 million paid annually for interest expenses has reduced its ability to invest in its business, especially its telehealth and clinical operations to support people taking GLP-1.
“The debt burden of the weight-lifter observer is not a direct result of recent operations or financial performance, but a result of strategic financial decisions,” the spokesperson said. “Recent changes in weight-viewer performance, which are composed of the 19th crisis and the emergence of GLP-1 drugs, have predicted the company and our financial situation, which affects our ability to repay debts under previously agreed terms.”
The spokesman pointed out that filing for bankruptcy will reduce the financial burden and thus free up the company’s investment in the business.
However, a better financial foundation may not completely change the fate of a weight watch.
Schnell said a major challenge for the company is the transition to a culture of weight loss. Although the company provides an app, virtual support and access to GLP-1, it is still considered a traditional weight loss company.
“WhighWatcher’s legacy model focuses on in-person workshops, openly weighs itself, points-based systems and storefronts – refuting current market trends,” Schnell said. “Consumers want private, digitally-first, confirmed healthy experiences themselves are rejections of ‘food culture’. WW can’t adapt quickly enough to customers’ expectations, and its brand represents what new markets have left behind.”
Schnell added that GLP-1S severely undermined the weight loss market, and Whighwatchers’ attempts to interact are “a classic case of the innovator’s plight.” Unlike traditional brands, digital-first brands like Hims & Hers and Ro are able to move to GLP-1 and “health-centric language” faster.
Another health care expert responded to the comments. Ian Chiang, a partner at Flare Capital Partners, explained that Whighwatchers’ brand is associated with behavioral change support, such as meals and fitness tracking, rather than clinical care services that prescribe medications.
Chiang added that retaining members “considering the plot nature of their plan” is also a major challenge. In addition, when it comes to prescribing GLP-1, it is difficult to compete with all other direct-to-consumer companies such as Hims & Hers and Ro, as well as more clinically focused companies. This includes Nowwell, one of the portfolio companies that Flare Capital partners.
Additionally, Oprah Winfrey left the Weight Watch Council in 2024, using GLP-1 as the “cultural nails in a coffin.”
“When your iconic spokesperson uses GLP-1 and leaves the board, it’s like your star player converting teams,” he said.
Meanwhile, executives at a weight loss and diabetes company believe that Weightwatchers’ plan simply won’t work.
“A method of calculating calories and taking ‘eat less, more ‘workout’ doesn’t work,” declared Sami Inkinen, CEO and co-founder of Virta Health. “In fact, yes, they have too much debt to serve it with incoming cash flows, so now it’s bankrupt. But that’s the fundamental problem that the program doesn’t work – it does bother the company.”
Meanwhile, Virta Health works with payers and employers and provides a “nutrition-first approach” and can prescribe medications if needed.
A Whighwatchers spokesman pointed out that the company has more than 180 studies and dozens of clinical trials have proved its approach. Randomized controlled trials show: “Our members reduce clinical weight while also improving overall dietary quality and reducing disordered dietary behaviors. Our evidence-based approach ensures that members are supported not only for weight loss, but also healthier and more sustainable eating habits.”
What is the bankruptcy for other weight loss companies?
Jenny Craig is one of the WhatWatchers direct competitors, and he has been struggling with his financial problems. Ultimately, the company closed in 2023 after more than 40 years of business, CNN reported, in part because of growing demand for GLP-1. Later, the Health and Wellness Company restarted it, but it existed purely online as the weight loss center was not reopened.
The fate of Jenny Craig and the weight watches does not necessarily represent a new generation of tech weight loss companies.
Take NOOM as an example, which starts with behavioral change support and then turns to providing clinical care. The company adopts behavioral science methods to lose weight, providing apps and coaching resources. It also provides opportunities for weight loss pills for those who need it. The company’s CEO Geoff Cook told Medcity News that it has no debt and has been profitable for years.
One difference, he said, is that weightlifters transition to clinical care by obtaining sequences, while NOOM constructs its clinical program. This makes NOOM more flexible when creating programs.
Schnell notes that the closer the company’s brand is to “traditional, discipline-centric model, the harder the transformation [to clinical care] Will. “He said NOOM is better positioned than weightlifters because it focuses on psychology with counting calories.
He added: “But they are always pure gameplay than the zero-friction D2C brands like Hims and Ro.”
Meanwhile, Chag stressed that “prescription services” companies focusing on episode care such as weight loss (such as weight watches) will always struggle with patient retention. To be successful, these companies “need to start figuring out how to actually deliver the highest quality, evidence-based clinical care and then be able to build a brand that patients can trust.”
Nowwell, provides weight management services and primary care. He noted that this did well, which in turn increased patient loyalty.
Going forward, the WeiverWatchers program “grows with science and consumer needs to blend healthcare, behavioral support and community connections for a holistic, personalized experience.” “As the market grows, especially around GLP-1 and other clinical interventions, we are committed to expanding our services to support members through every stage of their health journey.”
Photo: Santima.studio, Getty Images
