Jenny Craig will be revived by the owner of diet meal maker Nutrisystem
Jenny Craig is being revived for e-commerce in the coming months by the maker of a rival weight-loss meal provider that bought the defunct company’s brand assets out of bankruptcy.
Wellful Inc., a direct-to-consumer wellness business that also owns Nutrisystem, said it had acquired rights to Jenny Craig’s intellectual property for an undisclosed amount. Court documents dated June 2 show the IP priced at up to $10 million.
“People that have known the Jenny brand — the core aspects around the great food, the coaching, the overall program and the success they previously had — they can expect again,” Wellful CEO Brandon Adcock said in an interview.
Jenny Craig’s website has teased a reboot in recent weeks, saying it “will be coming to your home this fall.” Adcock said all former Jenny Craig customers have been notified by email and in the brand’s Facebook groups about the relaunch.
“Our goal is just treat them as best we can to win back their business,” he said.
After four decades in business, Jenny Craig, based in Carlsbad, California, filed for Chapter 7 bankruptcy in Delaware on May 5, court records show. The filing came two days after NBC News reported that the company had alerted employees to an imminent shutdown, which triggered a class-action lawsuit accusing management of violating 60-day-notice requirements for mass layoffs.
Jenny Craig couldn’t be reached for comment at the time. H.I.G. Capital, the $55 billion private-equity firm that acquired the brand for an undisclosed sum in 2019, didn’t respond to requests for comment about the case or Wellful’s acquisition.
The iconic weight-loss provider’s next act will be digital- and e-commerce driven, Adcock said. Members will still be able to order meals to their doorsteps and will still get access to personalized coaching, a core feature that previously took place across hundreds of physical locations but will now be completely virtual. Wellful’s acquisition doesn’t include any Jenny Craig real estate, he said.
Wellful is a privately held company formed by the 2021 merger of Nutrisystem and Adaptive Health, which Adcock co-founded in 2009. The company is majority-owned by Kainos Capital, a Dallas-based private-equity firm specializing in food and consumer products, which closed a $1 billion fundraising round in February.
Traditional diet-and-exercise brands have faced stiffer competition from a rapidly expanding array of weight-loss drugs, such as Ozempic, that are soaring in popularity. Adcock said he remains confident that both Nutrisystem and a revamped Jenny Craig can compete.
“The knowledge we have of speaking to the consumer in this category through our business with Nutrisystem, we’ll definitely be able to do that for Jenny Craig,” he said. But he acknowledged that “it’s obviously a very changing environment” and said he is watching the role pharmaceuticals are playing in the industry.
Adcock said Jenny Craig and Nutrisystem, which also sells weight-loss-focused prepared meals but doesn’t provide coaching, would be run separately within Wellful. He said prices at Jenny Craig would remain similar to what they were before its bankruptcy but declined to share more details.
Since Jenny Craig went belly up, customers have voiced their sadness and frustration on social media. Some said they’d rushed to brick-and-mortar stores in the days after the shutdown news to pick up their final meal orders before locations closed for good in early May. Several said they had failed to do so and were still trying to get their money back.
In still-running private Facebook groups where members once gathered to share weight-loss tips and support, nostalgic customers have been swapping recipes and cooking pointers to try to re-create their favorite Jenny Craig meals. A few have posted excitedly about the brand’s expected revival, while others vowed to never return.
Jenny Craig had employed around 1,000 people in the U.S. when it shut down, several corporate staffers, including a human resources official, said at the time. Adcock said Wellful is looking into hiring back some former employees as needed.
“We’ve already talked to a number of coaches, and we’ll continue to talk to more about coming into work on the brand,” he said.
Jack Raisner, the lawyer representing former Jenny Craig employees in the class-action lawsuit filed in May, said the case is on hold as the bankruptcy court deals with the company’s remaining assets and liabilities. Wellful isn’t affected by the class-action suit.
Raisner’s clients are seeking payment of wages they say they are owed under state and federal WARN Act rules, which generally require companies with at least 100 full-time workers to notify regulators and employees 60 days before mass layoffs or site closures. The complaint alleges that hundreds of former Jenny Craig staffers could be owed some restitution.