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When WeightWatchers filed for US bankruptcy protection this spring, as part of a deal to hand control to its secured lenders, investors could be forgiven for wondering whether this was the fat-loss company’s final Kodak moment.
Just as the film company struggled to adapt to the rise of digital cameras and video rental group Blockbuster passed up an early chance to buy Netflix, the diet group is under pressure to prove that it has not fallen behind the times.
With an enviable global brand and a workshop-based model that inspires passionate devotion, WeightWatchers was worth $6.7bn seven years ago. But a rebrand as WW Inc confused consumers just as competition from online apps dented its appeal, and the Covid pandemic decimated its meetings business. Now the rise of GLP-1 drugs such as Ozempic, Mounjaro and Wegovy have redefined weight loss. Its subscriber base has dropped by 30 per cent from its 2018 peak.
The bankruptcy filing allowed WeightWatchers to cut its debt by $1bn without entirely wiping out existing shareholders: they retain about 9 per cent of the equity. That could be a decidedly mixed blessing: it keeps the brand in the public eye but also means the company’s attempts to pivot will face scrutiny every quarter.
And pivoting is exactly what chief executive Tara Comonte, who took over last year and steered the Chapter 11 bankruptcy process, intends to do. She argues that the 62-year-old company still has broad resonance but needs to be adapted for the 2020s.
Comonte has recruited a new leadership team and doubled down on WeightWatchers’s 2023 purchase of a telehealth group that allowed it to get into the diet drug game. Clinical subscriptions, which include GLP-1 prescriptions and bring in nearly five times as much revenue as an ordinary membership, are a bright spot, rising 56 per cent year on year to 127,000.
“We help members manage side effects, adjust their nutrition and talk about what it means to show up in a new body or how to get through the holidays without drinking or eating so much,” says Kim Boyde, the group’s chief medical officer. “That community component is enormously important, especially in this day and age when we are more disconnected and lonely.”
WeightWatchers also plans to introduce a menopause care option in the autumn that will similarly combine medical care and behavioural support. While not as directly tied to the primary mission as diet drugs, the offering is well timed. Not only is there growing public awareness of the challenges women face during middle age, but many current WeightWatchers customers are in the target age range and weight gain is a common symptom.
The US healthcare system is also ill-equipped to deal with multi-faceted issues such as weight-loss and menopause, even when drugs are available. Doctors who are forced to rush from patient to patient in 15-minute increments often do not have time to talk through the physical, mental and behavioural changes that patients are experiencing. That leaves a hole that WeightWatchers hopes to fill.
“These medications were never designed to be taken by themselves. They’re most effective when prescribed with nutrition and exercise plans, and with support. No one else can deliver that at scale,” says Julie Rice, the group’s new chief experience officer, who co-founded cult exercise chain Soul Cycle.
Novo Nordisk’s recent decision to cut the list price of its GLP-1 drugs in half to $500 per month may further boost demand by making treatment more accessible to consumers without health insurance. Eli Lilly’s breakthrough diet pill could further open up the market to customers who are squeamish about injections.
Besides, WeightWatchers is not the only business having to retool because of weight-loss drugs. Gyms and health clubs are now emphasising strength training and social activities that complement GLP-1 use. The strategy is working: the Health & Fitness Association reports that membership climbed 6 per cent year-on-year in 2024, hitting historic highs and the number of fitness facilities expanded nearly 4 per cent.
Not all pivots work. Kodak eventually launched a user-friendly digital photo website, but sold it to Shutterfly, and Blockbuster eventually tried streaming. But if my run-ins with the time-pressed US healthcare system are anything to go by, WeightWatchers’ crisis is one that should not go to waste.
brooke.masters@ft.com
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