VEVEY, SWITZERLAND — The weight is over.
Amid swirling speculation over Nestle S.A.’s plans to divest weaker brands, the Vevey-based company has sold its Jenny Craig weight management business in North America and Oceania to North Castle Partners L.L.C., a Greenwich, Conn.-based private equity firm. Nestle’s Jenny Craig business in France is not part of the transaction. Financial terms of the acquisition were not disclosed.
Jenny Craig, founded in 1983, has been part of Nestle Nutrition since 2006, but the brand has been struggling in recent years, the company said.
“We do not disclose profit by businesses, but I will tell you that the Jenny Craig business — this year as well as last year — was very much below our expectations and below what they have been able to do in the last few years,” said Wan Ling Martello, chief financial officer of Nestle, in an Aug. 8 earnings conference call.
The company had shifted focus of Jenny Craig more to e-commerce and closed Jenny Craig centers in Europe.
“Jenny Craig, when we bought it, it was basically a U.S. and Australian business,” said Roddy Child-Villers, head of investor relations for Nestle, in the conference call. “We still have a good Australian business. We opened the U.K. operation. It was fundamentally an on-line operation, not a store-driven operation. And we have a small operation in France, and that continues.”
Declining to mention specifics, the company revealed plans to divest underperforming brands during an Oct. 1 investor seminar.
“Divestitures, we’re going to have some,” said Paul Bulcke, chief executive officer. “We’re not going to give figures on this, as you can imagine. But certain things that are not — that we can see — all of our strategy and all that — but we cannot enjoy the business. We want to be in business, not in agony.”
North Castle Partners invests in high-growth, middle-market businesses in the health and wellness category, including fitness facilities, performance equipment and apparel and personal care products. In 2010, the firm acquired Flatout, a brand of high-protein, high-fiber flatbreads.
North Castle Partners will offer employment to Jenny Craig staff in the affected regions.