The ANZ chapter of weight-loss meal subscription company Jenny Craig has entered voluntary administration in hopes to avoid the same fate.
Weightloss brand Jenny Craig closed down and filed for chapter 7 bankruptcy late last week in North America. The company started in Melbourne in 1983 as a bricks and mortar weight-loss centre by American entrepreneur Jenny Craig and her husband Sidney Craig and expanded into the United States in 1985. The company combines weight management counselling with a diet food subscription service and grew to prominence through the 1990s with celebrity endorsements.
The company has been showing signs it was in trouble for a while now with a reported $US250 million of debt. In an email sent to employees last week, Jenny Craig said it will close its 500 US and Canada bricks and mortar centres and cease online operations “due to its inability to secure additional financing.”
Initially, the company reported it would be moving to a fully online model after announcing the layoffs of up to 1000 people. A Jenny Craig spokesperson told NBC News that the company was “embarking on the next phase of our business to evolve with the changing landscape of today’s consumers. Like many other companies, we’re currently transitioning from a brick-and-mortar retail business to a customer-friendly, e-commerce driven model. We will have more details to share in the coming weeks as our plans are solidified.” However, just days later, the company announced it had filed for bankruptcy and closed up shop for good.
In response to this, Jenny Craig Australia and New Zealand, which operates separately from its US counterpart, entered voluntary administration today as it seeks a restructuring to “avoid the fate as the US business.”
FTI Consulting have been appointed as Voluntary Administrators with Administrator Vaughan Strawbridge stating, “it is unfortunate where an overseas parent company enters bankruptcy and impacts the local business, in particular, where they are operated independently to each other.
“We are working with the Australian and New Zealand leadership team to trade the businesses with a view to attracting new capital to restructure the Australian and New Zealand companies. Interest has already been received and we will be working with those parties and stakeholders of the business to secure the ongoing business and provide clarity to its loyal and committed staff and customers as soon as possible.”
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