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The Australian and New Zealand companies in charge of the Jenny Craig brand locally have today appointed voluntary administrators in the wake of US sister company Jenny C Holdings falling into bankruptcy last week.
Vaughan Strawbridge, Kate Warwick and Joseph Hansell of FTI Consulting have been appointed voluntary administrators of Jenny Craig Weight Loss Centres and its New Zealand counterpart, and will seek a restructuring of the two businesses which operate separately from the US company.
Though the brand had runaway success in the US with its weight loss programs, the company itself was actually founded by Jenny Craig and her husband Sidney Craig in Melbourne back in 1983.
The brand would go on to commence operations in the US two years later before scaling to reach 114 countries at its peak in the late ‘80s and eventually undergoing an IPO in 1991.
The US company declared bankruptcy on Friday last week citing cash flow problems as it sought a new buyer. As part of the collapse, customers’ auto-delivered subscriptions were cancelled while coaching sessions and merchandise sales ceased.
Administrators at FTI Consulting hope to save the ANZ businesses from a similar fate.
“It is unfortunate where an overseas parent company enters bankruptcy and impacts the local business, in particular, where they are operated independently to each other,” administrator Strawbridge said.
“We are working with the Australian and New Zealand leadership team to trade the businesses with a view to attracting new capital to restructure the Australian and New Zealand companies.
“Interest has already been received and we will be working with those parties and stakeholders of the business to secure the ongoing business and provide clarity to its loyal and committed staff and customers as soon as possible.”
FTI explains that the local managers of the brand hoped to avoid the appointment of administrators, but were forced to following the declaration of bankruptcy by their US counterpart.
“The management team in Australia and New Zealand have advised the administrators they had hoped to avoid an appointment being made, but unfortunately after the US business filed for bankruptcy and the non-repayment of a loan by the US business, despite undertakings to do so, has resulted in the directors of the Australian and New Zealand companies needing to appoint voluntary administrators,” FTI said.
“The administrators intend to continue to trade the Australian and New Zealand companies while they explore options to restructure them.”
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