Weight Watchers has been dropping value like it’s pounds, and an activist hedge fund wants to help.
The weight loss king has lost 86% of its value since last December as revenues dropped, reports the New York Post. An activist hedge fund recently bought much of the company’s $144 million in senior loans due next April, and is talking with partners about making a deal with the company’s majority owner, Invus Group’s Artal Group. Weight Watchers holds just $130 million in cash now, not enough to meet the April debt payment. The company also has a $2.1 billion junior loan due in 2020.
Weight Watchers has been losing out to wearables like Fitbit, and free weight loss apps recently. Active Weight Watchers participants have dropped 17% in the first quarter this year from a year prior. In North America, users fell 21% during that period. Writes the Post:
“We were slow to react to the realities of the mobile revolution,” Chief Financial Officer Nick Hotchkin said at a May conference. “Our systems were old and creaking and made us susceptible to free [diet] apps…I was very disappointed with the challenging start to 2015,” he said. “We know we are pursuing the right strategies and have the right assets.”
Photo: Mike Mozart via Flickr.