WeightWatchers Files for Bankruptcy to Cut Down Debt

The company announced that its first quarter revenues had fallen by 9.7 percent year over year.

A WeightWatchers meeting room and store location in Staten Island, N.Y., on June 28, 2016. Eugene Gologursky/Getty Images for Weight Watchers

Weight management company WeightWatchers has filed for bankruptcy protection to reorganize its business due to significant debt burdens.

The company announced that it filed for Chapter 11 bankruptcy at the U.S. Bankruptcy Court for the District of Delaware on May 6. It listed estimated assets and liabilities ranging from $1 billion to $10 billion, with the number of creditors at more than 100,000.

“WeightWatchers has a significant amount of debt on its balance sheet, some of it dating back decades. That’s money that could otherwise be utilized to invest in the business and the member experience,” the company said on its website.

WeightWatchers explored various ways to cut down debt, eventually deciding on a Chapter 11 bankruptcy, which it said allows for “an organized restructuring of a company’s balance sheet.” The bankruptcy does not mean the company is going out of business or liquidating, it clarified.

The financial reorganization transaction will “eliminate $1.15 billion in debt from the Company’s balance sheet, and position WeightWatchers for long-term growth and success,” the company said in the statement.

According to WeightWatchers, it expects to get through the bankruptcy process quickly, aiming to emerge from the reorganization process in roughly 45 days or sooner.

The company said it shall remain “fully operational” during the reorganization process and that there will be “no impact to members or the plans they rely on to support their weight management goals.” These plans include the “doctor-recommended weight loss program, telehealth offering with access to obesity-trained clinicians and prescription weight-loss medications, and virtual and in-person workshops,” according to the statement.

The company intends to pay in full all dues owed to trade creditors and other general unsecured creditors. WeightWatchers expects to remain a publicly traded company once the reorganization is completed.

Shares of the company increased by 11.26 percent on Tuesday.

“The decisive actions we’re taking today, with the overwhelming support of our lenders and noteholders, will give us the flexibility to accelerate innovation, reinvest in our members, and lead with authority in a rapidly evolving weight management landscape,” WeightWatchers CEO Tara Comonte said in a statement.

Earnings Release, Drug Offerings

The reorganization announcement was made the same day WeightWatchers revealed its first quarter earnings results.

Total revenues for the quarter were $186.6 million, down by 9.7 percent year over year. At the end of the quarter, the company had 3.4 million subscribers, a 14.2 percent decline on an annual basis.

Net loss came in at $72.6 million, down from $347.9 million in the prior year. The company did not provide guidance for fiscal year 2025.

Comonte said the company is going through a period of “significant reset” and is focused on its key priorities, such as revitalizing the brand and expanding revenue streams.

“As we execute our strategy with discipline, we are confident in our ability to stabilize the business and build the path back to growth,” she said.

In recent years, WeightWatchers has adjusted its business model of focusing on diet plans to also offer weight loss medications to users amid a rise in popularity of these drugs.

In March 2023, the company acquired telehealth platform Sequence, which prescribes weight loss medications to people. In December that year, WeightWatchers launched the GLP-1 Program, which provides support for people on weight loss drugs such as Ozempic.

“What we’ve seen is that people taking GLP-1 medications need help with a different set of behavioral challenges in comparison to people not on these medications,” Gary Foster, WeightWatchers’s chief scientific officer, said at the time.

WeightWatchers announced late last month that it partnered with Eli Lilly and LillyDirect to streamline member access to Zepbound, an obesity drug.

A study published in Nature Medicine on Jan. 20 found that GLP-1 drugs, such as Ozempic and Wegovy, may help with certain health conditions while also increasing the risk of other health issues.

The use of these medications was associated with a reduced risk of seizures, cardiometabolic disorders, neurocognitive disorders such as dementia and Alzheimer’s, several respiratory conditions, and infectious illnesses, among others, according to the study.

On the flip side, “there was an increased risk of gastrointestinal disorders, hypotension, syncope, arthritic disorders, nephrolithiasis, interstitial nephritis, and drug-induced pancreatitis,” it said.

Dr. Ziyad Al-Aly, co-author of the study, said the findings “underscore the possibility for wider applications for these medications but also highlight important risks that should be carefully monitored in people taking these drugs.”