WeightWatchers is preparing to file for bankruptcy in the coming months as part of a plan to hand control of the business to its creditors.
The popular weight loss company has been struggling financially amid changing consumer preferences.
WW (formerly Weight Watchers) is a commercial weight-loss programme that helps people make healthier food choices and build long-term habits.
The Wall Street Journal reported Wednesday that WW International, as the company is officially known, is readying for Chapter 11 proceedings.
The company faces more than $1.4 billion (around £1.12bn) in loans and bonds that are coming due in 2028 and 2029.
Financial troubles have been mounting for the weight loss giant, with revenues falling by $104million (approximately £83m) to $786m (roughly £629m) in 2024.
S&P Global recently downgraded WW International's credit rating, noting the company is struggling to attract younger customers.
The company's troubles come as blockbuster weight-loss drugs like Ozempic and Wegovy continue to surge in popularity
GETTYFounded in 1963 by American businesswoman Jean Nidetch, WW has seen share prices plummet by more than 90 per cent over the past year.
In February, S&P Global downgraded WW International's credit rating after the company drew down the full $175m of a revolving credit facility.
The ratings agency warned that WeightWatchers is in financial distress and could default—either through bankruptcy or an out-of-court restructuring—within the next six months.
Reports from February suggested that restructuring talks were already underway. The company's troubles come as blockbuster weight-loss drugs like Ozempic and Wegovy continue to surge in popularity, reshaping the diet industry on both sides of the Atlantic.
The company's business model has struggled to compete with the pharmaceutical alternatives
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These medications have disrupted traditional weight-loss programmes, leading to a drop in subscribers and revenue for WeightWatchers.
While the company has tried to adapt by integrating these drugs into its services, the move hasn’t been enough to reverse its financial decline.
This pharmaceutical trend has sparked a collapse in demand for traditional weight management services like those offered by WeightWatchers.
The company's business model, which helps users monitor their diets by attributing scores to different foods, has struggled to compete with the pharmaceutical alternatives.
The company suffered a further blow last year when Oprah Winfrey stepped down as a member of its board after almost a decade.
The celebrity TV show host had been closely associated with the WeightWatchers brand.
Winfrey's departure came after she admitted that she had used weight loss drugs as a "maintenance tool".
This revelation from such a high-profile figure further highlighted the shift towards pharmaceutical weight loss solutions.
WW is a commercial weight-loss program that helps people make healthier food choices and build long-term habits
GETTYShares of WW International plunged 62 per cent to 18 cents on Wednesday following the bankruptcy reports.
The stock rebounded slightly by nearly two per cent at midday Thursday.
Shares have been trading under £1 since early February, when reports of restructuring talks first emerged.
The company's stock has been in freefall, reflecting investor concerns about its ability to navigate the changing weight loss market.
