Weight Watchers, the brand built on providing support for people who are trying to lose weight, filed for bankruptcy protection. The company is burdened with debt as more customers turn to medication.
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This week, WeightWatchers announced that it’s filing for bankruptcy. The company has become a household name for countless Americans trying to lose weight, but as NPR’s Yuki Noguchi reports, it’s been burdened with debt as its customers turn more towards medications instead.
YUKI NOGUCHI, BYLINE: WeightWatchers was started by a housewife struggling with overeating in the 1960s. It gained a worldwide following using a method it developed to track food intake through a point system and encouraging members to attend regular support meetings to stay on track. But in recent years, health care stock analyst Karl Thiel with The Motley Fool says WeightWatchers was struggling. Then new GLP-1 obesity treatments like Wegovy and Zepbound shifted consumers toward medical solutions.
KARL THIEL: The rise of GLP-1 drugs are a huge factor in WeightWatchers’ problems, but it’s kind of like the log that broke the camel’s back. I mean, it’s a big factor, but it is by no means the start of their problems.
NOGUCHI: Thiel says the company was saddled with debt from a leveraged buyout in the late 1990s. In its bankruptcy filing, the company is seeking to restructure more than $1 billion in debt.
THIEL: Even the interest cost on this debt was a substantial amount of the money that they were bringing in. They were seeing declining memberships.
NOGUCHI: Last year, its most prominent spokesperson and stockholder, Oprah Winfrey, left the WeightWatchers board. Then, basically, the competition ate its lunch. WeightWatchers says it plans to continue to operate as normal while it undergoes restructuring in Chapter 11 bankruptcy. It still also offers the in-person support groups it became famous for, but its membership has declined as dieting and lifestyle change overall take a back seat to the new treatments.
THIEL: The drugs in a way are an easy solution, and so people are not as interested in the behavioral part.
NOGUCHI: But Thiel says WeightWatchers was caught flat-footed as it’s tried to push its business into telehealth services, selling those same obesity drugs online. He notes there are numerous other companies – like Noom, Ro and Hims and Hers – already doing the same.
THIEL: You know, when you can do it through a simple iPhone app, it might be cheaper and easier and less involved.
NOGUCHI: Yuki Noguchi, NPR News.
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