North Castle Partners to acquire most of the Jenny Craig diet chain and combine it with its Curves fitness clubs for women.
(Unhappy Franchisee) According to Bloomsburg, Nestle SA has agreed to sell most of its Jenny Craig diet business to Curves International parent company North Castle Partners for an undisclosed amount.
According to the Bloomsburg article:
Nestle will divest Jenny Craig in North America, Australia and New Zealand, the Swiss company said today in a statement. The price was probably less than the approximately $600 million Nestle paid in 2006, analysts at Natixis and SNS Securities said. The French business isn’t part of the transaction with the Greenwich, Connecticut-based private-equity firm, which will combine Jenny Craig with its Curves fitness clubs for women.
Eddy Hargreaves, an analyst at Canaccord Genuity in London, wrote that the brand has been a “perennial underperformer” and “been a drag on overall North American performance in recent years.”
The article states:
Jenny Craig has suffered as dieters shift to newer weight-loss remedies and cut spending, so the business has exited the U.K. and closed diet centers in the U.S. Analysts Pierre Tegner at Natixis and Richard Withagen at SNS Securities both said North Castle probably paid less than Nestle’s purchase price seven years ago.
Jenny Craig’s net annual sales were probably less than 400 million Swiss francs ($439 million), Natixis estimated…
The news will no doubt come as a shock to the struggling Curves franchise owners who regularly speak out on UnhappyFranchisee.com’s Curves Complaint Board.
North Castle’s combination of Jenny Craig with Curves International, a fitness club chain it acquired last year, will offer nutrition planning and strength training “under one roof,” the company said in a statement. Monty Sharma, CEO of Waco, Texas-based Curves, will run the business.
“Putting Curves together with Jenny Craig will bring our total business to a new level and allow us to offer consumers all of the tools they need,” Sharma said in the statement.
North Castle focuses on health and wellness businesses with revenue ranging from $10 million to $200 million, according to its website. It also owns Red Door Spas and Performance Bicycles.
The new owners will offer employment to Jenny Craig’s workers, Nestle said. Jenny Craig employs 3,000 people, according to company spokesman Robin Tickle.
One question of many: How does North Castle plan to “offer employment to Jenny Craig’s workers” when it is Curves franchisees who employ the vast majority of the Curves workforce?
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