Jenny Craig will shut its doors after 4 many years within the weight reduction and diet enterprise, in keeping with inner communications to employees reviewed by NBC News.
In an electronic mail despatched to employees late Tuesday, the corporate stated it will shut “on account of its incapacity to safe extra financing.” Jenny Craig company and salaried area employees’ final day will be Friday, and hourly heart employees’ final day working was Tuesday. The firm operated about 500 company-owned and franchised shops within the United States and Canada, in keeping with H.I.G. Capital when it acquired Jenny Craig for an undisclosed quantity in April 2019. It now employs greater than 1,000 individuals.
Last week, company employees on the firm’s Carlsbad, California, workplace acquired a WARN Act discover that the corporate can be closing the workplace June 24, however could shut as quickly as Friday. A FAQ was additionally despatched by Jenny Craig to employees, explaining that it would wind down bodily operations to transition to an e-commerce mannequin.
For the previous two weeks, Jenny Craig had been operating out of cash as it looked for a purchaser. Bloomberg Law reported final month that the corporate was pursuing a sale. Two present Jenny Craig company employees say they worry the corporate will file for chapter by the top of the week.
Neither Jenny Craig nor H.I.G. Capital, a $55 billion non-public fairness agency, have responded to requests for remark.
Jenny Craig was based in 1983 to assist individuals shed weight, and the model grew to become a family title for its weight reduction program. The program offered particular menus designed by cooks and nutritionists to assist customers shed weight. The firm recruited celebrities to entrance the model, together with actors Kirstie Alley, Valerie Bertinelli and Jason Alexander, and singer-songwriter Mariah Carey.
The firm has confronted elevated competitors just lately after a handful of medicine that may assist individuals shed weight, resembling Wegovy, Rybelsus and Ozempic, hit the market promising to assist customers shed kilos. The core of Jenny Craig’s client-facing operations occurred largely at its bodily facilities, in keeping with employees, however customers typically have been pivoting extra towards on-line providers in recent times.
Last week after reporting on the potential layoffs, a Jenny Craig spokesperson advised NBC News that the corporate “is embarking on the following part of our enterprise to evolve with the altering panorama of at this time’s customers. Like many different corporations, we’re at present transitioning from a brick-and-mortar retail enterprise to a customer-friendly, e-commerce pushed mannequin. We will have extra particulars to share within the coming weeks as our plans are solidified.”
There isn’t any indication in the newest communication to employees that the transition to an e-commerce mannequin will nonetheless occur.
Jenny Craig employees say there was no indication previous the previous two weeks that the corporate was spiraling. One month in the past, the corporate was posting job openings on LinkedIn, and one worker says she was given a increase and new coaching just some weeks prior.
Jenny Craig’s coverage is to offer severance pay to laid-off employees “based mostly on job stage and tenure with the corporate,” in keeping with the FAQ doc it despatched out final week.
“However, presently, it is extremely unlikely that these will be paid,” it stated.
The firm advised employees within the termination letter that they will obtain a “ultimate paycheck, together with your full compensation earned by your final day of labor and all accrued, unused paid time without work.”
