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A one-two punch of diet drugs and TikTok undermined one of the most trusted brands in fat loss, lawyers for WeightWatchers told a US bankruptcy judge on Thursday, as the bankrupt company seeks to reorganise into a slimmer version of itself.
WeightWatchers, officially known as WW International, Inc., filed for Chapter 11 bankruptcy protection on Tuesday night in a Delaware federal court with the company having already cut a pre-packaged deal to hand control of the business to secured lenders and bondholders.
As recently as 2018, WeightWatchers, whose core business relied on hosting workshops for people sharing the experience of fighting fat together, had $1.5bn in annual revenue and a market capitalisation of more than $7bn. Oprah Winfrey owned a tenth of the company and joined its board of directors.
But the Coronavirus pandemic gutted the WeightWatchers workshop model, and annual revenue fell to under $800mn by 2024. Winfrey left the company’s board last year. Its lawyers said it could no longer service a $1.6bn debt load because of an “evolution in consumer preferences and the rapid rise of GLP-1s”, and it was seeking an aggregate valuation of $700mn.
“Consumers are increasingly prioritising holistic health and rejecting traditional weight-loss narratives,” WeightWatchers wrote in a court filing submitted this week.
“The rise of free and low-cost do-it-yourself (“DIY”) weight-loss apps reflects consumers’ growing demand for self-guided, flexible solutions. The DIY trend is further fuelled by influencers sharing personal success stories and guidance via social media, including Instagram, TikTok and YouTube.”
In 2023, WeightWatchers bought the telehealth start-up Sequence for $106mn. Sequence then became the company’s clinical offering that could prescribe GLP-1s like Ozempic and Wegovy. Still, the company remained largely wedded to the workshop model even as its subscriber count fell 12 per cent to 3.3mn in 2024, and its new prescription business failed to make up the difference.
By comparison, Him and Hers, a telehealth company that went public in 2021 and also offers weight loss drug prescriptions, has seen its market capitalisation soar to more than $11bn.
WeightWatchers is expected to exit bankruptcy next month. Its lawyers told the court current shareholders could get just under a tenth of the company’s reorganised equity, potentially worth $20mn or $30mn, if certain milestones are hit during the bankruptcy process.
Last year, the company’s then chief executive officer, Sima Sistani, told the FT that WeightWatchers was attempting to be a judgment-free “weight health” company embracing “a full spectrum of solutions”. She left the company five months later.
