Jenny Craig Lives On, After All, As Wellful Reboots It As Online Service

Topline

Struggling weight loss company Jenny Craig, which told employees it would shut down physical operations after four decades just two months ago, will be resurrected this fall as an online service after wellness brand Wellful acquired it, as the diet giant looks to remain competitive while Americans increasingly turn to weight-loss drugs, like Novo Nordisk’s massively popular Ozempic.

Jenny Craig plans to relaunch as an online company after its acquisition on Wednesday by Wellful.

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Key Facts

Wellful, the owner of low-calorie meals brand Nutrisystem, announced in a press release it will acquire Jenny Craig and relaunch it as a “direct-to-consumer delivery model” this fall.

Jenny Craig, which was founded in 1983 and launched U.S. operations in 1985, had been struggling in recent years amid a rise in weight-loss alternatives, including Novo Nordisk’s diabetes drug Ozempic, which earned the nickname of Hollywood’s “worst kept secret,” growing so popular it sparked a nationwide shortage late last year.

In May, Jenny Craig informed salaried employees in an ominous email obtained by NBC News they would be laid off that week and that the company was closing its headquarters in Carlsbad, California, and winding down “physical operations” in order to transition to an e-commerce model.

Wellful plans to manage Jenny Craig separately and as an independent brand from its Nutrisystem meals, the company announced.

What We Don’t Know

How much Wellful spent to acquire Jenny Craig. While a price wasn’t listed in the company’s press release Wednesday, court filings from June obtained by NBC News show Jenny Craig’s intellectual property is valued as high as $10 million.

Key Background

Jenny Craig told employees in May it would shut its doors as it searched for a buyer, causing shares of parent company HIG Capital to drop more than 1% the day of the announcement, after falling more than 7% on the year. The cuts were the latest in a series of major companies in the U.S. to implement layoffs, including at-home workout companies Tonal, Hydrow and Peloton, which underwent four rounds of layoffs last year.

Tangent

Novo Nordisk’s Ozempic, a brand of semaglutide, has surged in popularity in recent months, with celebrities and billionaires, including Twitter and Tesla owner Elon Musk, promoting its use for weight loss—Ozempic was first approved in 2017 to lower blood sugar among people with type-two diabetes and has not been approved for weight loss purposes. In June 2021, however, the Food and Drug Administration approved Wegovy, a semaglutide injection to lower blood sugar, for chronic weight loss, while Eli Lilly is also pushing for fast-track FDA approval for weight-loss use for its diabetes drug Mounjaro, after a series of promising clinical trials.