WeightWatchers, now operating as WW International Inc., announced it is filing for Chapter 11 bankruptcy protection to alleviate $1.15 billion in debt. The company aims to transition into a telehealth service provider and has the backing of nearly 75% of its debt holders. They expect to exit bankruptcy within 45 days. Founded over 60 years ago, WeightWatchers has faced difficulties recently, including a significant revenue decline of 10% in the first quarter of 2023 and a loss of 47 cents per share on an adjusted basis. However, its clinical subscription revenue, mainly from weight-loss medications, surged by 57% year over year, reaching $29.5 million.
In a strategic move, WeightWatchers acquired Sequence for $106 million, now known as WeightWatchers Clinic, which allows users to obtain prescriptions for drugs such as Ozempic and Wegovy. Leadership changes also occurred recently; CEO Sima Sistani resigned in September, and Tara Comonte, a board member and former Shake Shack executive, has been appointed as interim CEO. Comonte emphasized the company’s commitment to providing trusted, science-backed solutions for weight management, particularly as societal conversations shift towards long-term health.
Despite these efforts, the company’s stock has struggled, trading below $1 since February. Following the bankruptcy announcement, shares plummeted by 50% to 39 cents in after-hours trading. The bankruptcy petition was submitted in the U.S. Bankruptcy Court for the District of Delaware, marking a significant turning point for the company as it seeks to redefine its business model amid ongoing challenges.
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