WeightWatchers files for bankruptcy after growth in weight-loss drugs

Company struggled to compete with drugs like Ozempic

The company also reported a 14.2% decrease on its end-of-period subscribers for the quarter.

WeightWatchers, known for its diet programmes once endorsed by celebrities including Oprah Winfrey, has filed for bankruptcy after struggling to compete with drugs like Ozempic.

The company filed a prepackaged Chapter 11 petition in the US to execute a lender-backed plan that would cut about $1.15bn (€1bn) in debt from its balance sheet. It expects to complete the reorganisation in about 45 days.

WeightWatchers said the restructuring plan would “significantly reduce” its debt obligations. The proposed restructuring must be approved by a bankruptcy judge.

WeightWatchers tried to ride the weight-loss drugs wave by offering a few on its platform, but found it challenging to convince clients its programmes were still worth their time. 

The company has also been grappling with annual interest expenses of more than $100m (€88.3m), which has limited its ability to invest in growth initiatives and marketing, according to court filings.

The company is seeking court protection in Delaware after Bloomberg News reported last month it was preparing to file in the coming weeks following a debt-restructuring agreement with the majority of its lenders.

Prepackaged bankruptcies generally allow companies to exit Chapter 11 quickly and without disruption to their business or unsecured creditors.

WeightWatchers said the restructuring plan would retain $175m (€154.6m) previously drawn by the company from its revolving credit facility and reduce its annual interest expense by about $50m. 

The plan envisages the reorganised company issuing $465 million in new term loans and notes, which will mature five years from the effective date of the restructuring, filings said.

WeightWatchers, which has about $1.6bn (€1.4bn) in funded debt, reported revenue of $186.6m (€164.9m) in the first quarter of the year, a 9.7% 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% decrease on its end-of-period subscribers for the quarter, and a net loss of $72.6m. It did not provide guidance for the full 2025 fiscal year.

Bloomberg