Save articles for later
Add articles to your saved list and come back to them any time.
Weight loss company Jenny Craig has played down concerns that its local operations will fold after news overnight that its US parent company is closing its doors and will terminate jobs by the end of the week.
In a statement, Jenny Craig said its Australia and New Zealand operations were “currently [continuing] to operate and support our clients” despite the US business “intending to file for bankruptcy”.
Jenny Craig has struggled amid increased competition, including against much-hyped new weight loss drugs.Credit: Steven Siewert
“While this is unfortunate news for our colleagues in the USA, the Jenny Craig operations here in Australia and New Zealand do act independently,” the statement said.
Jenny Craig was founded in Melbourne in 1983 by Jenny Craig and her husband, Sidney Craig, as a weight management and nutrition company that provides weight-loss coaching with frozen meals. The pair set up operations in the US two years later and became a household name, with more than 600 centres across the world, including Australia, New Zealand and the US.
Over the decades, the company has changed hands a number of times. Miami-headquartered private equity firm HIG Capital acquired the Jenny Craig business, including Australian operations, in 2019 but has reportedly been pursuing a sale since early March this year and had plans to move to an online model, according to Bloomberg.
Documents lodged to the Australian Securities and Investments Commission show the local business has been in trouble for at least two years.
Jenny Craig was founded in Melbourne in 1983 by Jenny Craig and her husband Sidney Craig.Credit:
Jenny Craig Australia’s most recent annual report showed net profits after income tax was less than $1.4 million for the financial year ending December 31, 2021, a sharp drop from the $6.9 million posted the year prior. Net cash from operating activities also reduced by 90 per cent, from $11.9 million to $1.2 million.
Auditor BDO, which compiled the report, warned that the company’s future was in doubt.
“These conditions indicate a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern,” said the report signed by BDO director James Mooney.
Jenny Craig’s parent company had “irrevocably confirmed that they will provide sufficient financial support to enable the company … until at least 12 months from the date on which the directors’ report is signed”, the report stated.
“Should the company be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than the ordinary course of business.”
Jenny Craig’s Australian operations include more than 60 centres and 441 employees.
Jenny Craig management told US workers in an email that the business was closing “due to its inability to secure additional financing”, NBC reported.
Corporate and salaried employees’ final day will be on Friday, whereas hourly paid centre workers worked their last day on Tuesday.
Jenny Craig had been seeking a buyer as it struggles amid increased competition, including against much-hyped new weight loss drugs and the impact of the COVID-19 pandemic as customers stayed home.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
Most Viewed in Business
From our partners
Source: Read Full Article