CARLSBAD — Carlsbad-based Jenny Craig is closing its doors after four decades as one of the country’s leading weight loss companies.
Jenny Craig, with more than 700 centers worldwide, announced its decision last week to close its North American locations (500 in U.S. and Canada) after filing for Chapter 7 bankruptcy.
The company has since stopped all auto-delivery subscriptions, coaching sessions, food orders and merchandise sales online and at corporate centers.
About 1,000 employees will be out of work, according to media reports.
“It’s with a heavy heart we’re announcing the close of our business,” according to a company statement. “The last 40 years would not have been possible without you.”
Per Bloomberg, the company has about $250 million in debt and struggled to find a buyer as other companies in the weight loss industry have gathered market share.
Jenny Craig was launched in the early 1908s in Melbourne, Australia, when the company’s namesake, Jenny Craig, struggled to lose weight after giving birth to her second child with husband Sidney Craig.
The business centered on a structured diet plan based on prepackaged foods to manage calorie intake and portion sizes to promote healthy eating.
Even though Craig retired and sold her stake in the company 21 years ago, she told the San Diego Union-Tribune she was devastated to learn of the company’s debt, which never occurred under her direction.
The business was run by Nestlé Nutrition from 2006 to 2013 and then sold to private equity firms. In 2019, H.I.G. Capital bought the company despite no experience in the weight loss industry.
In the wake of the closure, some former employees are seeking to join a class-action lawsuit alleging the company violated federal and state WARN Acts, requiring companies to give a 60-notice ahead of layoffs or facility closures, according to NBC.
The suit was filed on May 4 in New Jersey, two days after the company emailed all employees about the impending closure. State and federal law requires companies with 100 full-time employees or more to notify governments and employees 60 days before the layoffs.
Employees received the email on April 25, but the company said it was possible the business could shut down on May 5.