“Jenny Craig’s Online Weight Loss Business Acquired by Healthcare Startup with Prescription-based Model”

Weight-Loss Company Jenny Craig’s Online Arm Sold to Eucalyptus, as Administrators Recommend Liquidation

Weight-loss company Jenny Craig’s online business in Australia and New Zealand will be sold to Eucalyptus, a healthcare technology start-up company, as administrators recommended placing the company into liquidation. The decision was announced by administrators FTI Consulting after attempts to sell the operations and preserve as many jobs as possible. The sale of the online arm of the business to Eucalyptus, which rose to prominence prescribing weight-loss drugs, will enable the company to provide continued online weight management solutions to customers, but the 91 stores across Australia and New Zealand will cease trading and staff will be made redundant.

An Unfortunate Outcome for Jenny Craig

The recommendation for liquidation was made after the administrators were unable to find a buyer for the physical stores and employees of the Australian and New Zealand business, despite receiving interest from 15 parties and four non-binding offers. The Covid-19 pandemic supply chain issues, coupled with several non-performing stores and insufficient working capital to address the problems, also contributed to the collapse of the company.

FTI Consulting described the outcome as “unfortunate,” and with the next meeting of creditors for the Australian and New Zealand companies of the Jenny Craig group scheduled for 14 June, the recommendation for liquidation is expected to be confirmed.

The Growing Demand for Digital Health Services

The acquisition of Jenny Craig’s online arm by Eucalyptus illustrates the growing demand for digital health services and prescription-based models. Eucalyptus has gained popularity by offering prescription weight-loss drugs, and the sale of the Jenny Craig’s online business is expected to take the company further in this direction.

With services such as Eucalyptus, customers can receive prescription over a text chat or questionnaire, prompting the Medical Board of Australia to issue guidelines for doctors last month. These guidelines state that video chat or phone call is preferred as the method of consultations for telehealth. The sale of the online arm by Jenny Craig to Eucalyptus reinforces the need for healthcare providers to adapt to changing consumer preferences and technological advances.

A Harsh Reality for Jenny Craig Employees

The fate of the physical stores and employees of the Australian and New Zealand business highlights the harsh reality of the economic impact of the pandemic. With the closure of all stores across both countries and the resultant job losses, the recommendation for the liquidation of Jenny Craig’s business serves as a stark reminder of the need for businesses to pivot and restructure to meet the changing market conditions.

As the Australian and New Zealand arms of Jenny Craig come to a close, it is imperative for businesses in the weight-loss industry and other sectors to consider how they can adapt to the changing economic landscape. Advancements in technology and increasing customer demand for digital health services offer alternatives for businesses to consider as they navigate the post-pandemic world.