WeightWatchers files bankruptcy as GLP-1 drugs reshape market
[NEW YORK] WeightWatchers, known for its diet programmes once endorsed by celebrities including Oprah Winfrey, has filed for bankruptcy after struggling to compete with weight-loss drugs such as Ozempic.
The company -which rebranded to WW International – filed a prepackaged Chapter 11 petition to execute a lender-backed plan that would cut about US$1.15 billion in debt from its balance sheet. It expects to complete the reorganisation in about 45 days.
WeightWatchers said the restructuring plan will 'significantly reduce' its debt obligations. The proposed restructuring must be approved by a bankruptcy judge.
WeighWatchers tried to ride the weight-loss drugs wave by offering a few on its platform, but found it challenging to convince clients that its programmes were still worth their time alongside the medications.
The company is seeking court protection in Delaware after Bloomberg News reported last month that WeightWatchers was preparing to file in the coming weeks following a debt-restructuring agreement with the majority of its lenders.
Prepackaged plan
Prepackaged bankruptcies generally allow companies to exit Chapter 11 quickly and without disruption to their business or unsecured creditors.
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WeightWatchers said the restructuring plan would retain US$175 million previously drawn by the company from its revolving credit facility, reduce its annual interest expense by about US$50 million and extend debt maturities.
WeightWatchers, which listed assets and liabilities each of between US$1 billion and US$10 billion, reported revenue of US$186.6 million in the first quarter of the year, a 9.7 per cent drop compared to a year before, dragged down by headwinds in the Behavioral business due to lower incoming subscribers and recruitment challenges.
The company also reported a 14.2 per cent decrease on its end of period subscribers for the quarter, and a net loss of US$72.6 million. It did not provide guidance for the full 2025 fiscal year.
The company will host a call with investors on Tuesday (May 6) to explain the debt-cutting agreement with creditors. BLOOMBERG
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