Carlsbad-based Jenny Craig shutting down after four decades

Jenny Craig, a Carlsbad-based weight loss institution for nearly four decades, will soon be closing its doors, a move that comes amid reported financial troubles and efforts to sell the company.

In a federally mandated WARN Act notice sent out by the company last week, Jenny Craig stated that it planned to close its Carlsbad headquarters by June 24 and as a result would be terminating its 146 employees who work in that location. The letter, however, notes that the closure could come as early as Friday.

“While the Company is making best efforts to secure the additional financing required to continue operations, it may need to close the Carlsbad Facility as early as May 5, 2023, in which case the Separation Date would be the date of the closure,” the company wrote.

The headquarters closure is expected to affect the company’s storefront locations across the country. Jenny Craig describes itself as “one of the world’s largest weight-loss and weight-management companies,” with nearly 500 company-owned and franchised locations in the U.S. and Canada, and roughly 600 centers worldwide. In San Diego County, there are five weight-loss center locations.

As first reported by NBC, employees learned of the impending closure earlier this week via email stating that the company would be closing “due to its inability to secure additional financing.”

Executives with Jenny Craig owner, H.I.G. Capital, could not be reached for comment.

Co-founder Jenny Craig, reached through a text message on Wednesday, said she had been traveling and was unaware of the news. She did not respond to subsequent emails and texts requesting comment on the company closure.

A Jenny Craig storefront in the Hazard Center in Mission Valley was closed Wednesday afternoon.

(Lori Weisberg / San Diego Union-Tribune)

It remains unclear what the Jenny Craig shutdown will mean for consumers who have signed up for the program, paid for the services of a coach and have food delivered to their homes. There is no information on the company website or on its Facebook page. A visit Wednesday afternoon to one of the Jenny Craig stores — in Mission Valley — also revealed little information. It was locked and there were no notices or signs on the door advising customers of the planned closure. Employees at a neighboring business said they had seen people inside Jenny Craig as recently as Friday.

The weight-loss and weight-management market — which includes diet supplements, food and weight-management services — was worth about $224.27 billion in 2021, according to market research firm Facts and Factors. For a long time, the primary way for consumers to lose weight was through lifestyle programs offered by companies such as Weight Watchers, Nutrisystem and Jenny Craig.

But more recently, business models that required people to sign up, stick to a program and track progress over time have encountered an increasingly popular competitor. People are turning to weight-loss drugs that are all over social media and promise rapid results. Injectable medications such as Ozempic and Wegovy, which were originally developed to treat diabetes, have been prescribed more and more for off-label use to jump-start weight loss.

“I think they (the new drugs) are going to transform the industry of weight loss in a pretty big way,” said Alex Fuhrman, senior research analyst at Craig-Hallum Capital Group, in a recent interview with the Wall Street Journal. “The traditional approach to weight loss has been the only game in town for a very long time except for more drastic surgical interventions. The behavioral approach to weight loss is going to be under pressure now.”

Sidney and Jenny Craig founded their weight-loss company in Melbourne, Australia, in 1983 and moved it to Carlsbad two years later. Sidney Craig stepped down as the company’s chief executive in 2003, and he and his wife later sold all of their shares as part of a buyout by Nestle. Sidney died in 2008.

Over the years, Jenny Craig became a household name through TV commercials that featured celebrity spokespeople such as actor Valerie Bertinelli, “Seinfeld” star Jason Alexander and pop icon Mariah Carey touting the weight-loss program.

The company changed hands a few times over the last decade and a half, with the most recent sale four years ago when H.I.G. Capital, a global private equity investment firm, acquired it for an undisclosed price. Jeff Zanarini, managing director at H.I.G., said at the time, “We believe Jenny Craig represents an ideal opportunity to invest in the premier provider of weight loss services, especially with the rising prevalence of overweight adults.”

Although the business thrived for its first two decades, at one time rivaling Weight Watchers, it began facing financial challenges as dieters sought out newer weight-loss remedies and cut spending. More recently, Bloomberg reported that the Carlsbad company had been seeking a buyer as it continued to overcome growing competition and hype about new weight-loss drugs.

A longtime resident of San Diego County, Craig has been a prominent figure in the business community for decades, but she and her husband were also known for their philanthropy. A $10-million donation made by Sidney Craig in his wife’s name was responsible for the development in 2000 of the University of San Diego’s Jenny Craig Pavilion for sports and recreation.