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View Full Version : Atkins bankrupt as diet's fade hits bottom line


Smith will Suffice
02-08-05, 18:53
Atkins Nutritionals Inc., founded by the late diet guru Robert Atkins, filed for bankruptcy protection in New York after consumer interest in low-carbohydrate weight-loss programs faded.
The closely held company, whose breakfast bars, shakes and other foods are sold in more than 30,000 stores in North America, listed assets of $301 million and liabilities of $325 million in Sunday's Chapter 11 filing in U.S. Bankruptcy Court in New York. UBS Securities LLC and other lenders are owed about $301 million under a 2003 financing agreement.
The Atkins diet advocates shedding pounds by avoiding carbohydrates, the energy-supplying sugars and starches found in bread and pasta. Less than 4 percent of the U.S. population said it was following a low-carbohydrate diet at the end of 2004, down from about 9 percent earlier in the year, according to NPD Group, a consultant based in Port Washington, N.Y.
''The low-carb fad has gone,'' said Michael Steib, a consumer-goods analyst for Morgan Stanley in London. ''Dieting habits are very short-lived. It came very quickly and disappeared very quickly.''
Atkins Nutritionals, based in Ronkonkoma, N.Y., also lost sales to larger rivals including Unilever and Kraft Foods Inc. They responded to the Atkins diet's popularity by introducing their own low-sugar lines, such as Unilever's Carb Options and Kraft's South Beach diet meals.
''Mainstream companies such as Unilever, Kraft and General Mills broke into the controlled-carbohydrate market in 2004 with well-funded, aggressive product launches,''

Rebecca Roof, Atkins' chief restructuring officer, said in court papers. As a result, sales last year were ''dramatically less than forecast,'' Roof said.
More than 25 million books related to the Atkins diet have been sold since 1972, said Richard Rothstein, an Atkins Nutritionals spokesman. ''Dr. Atkins' New Diet Revolution,'' which encouraged readers to eat meat, eggs and cheese, enjoyed a five-year run on the New York Times best-seller list in the late 1990s, with more than 10 million copies sold.
Robert Atkins founded the company in 1989 as Complimentary Formulations Inc. and renamed it in 1998. He died in April 2003 at age 72, nine days after suffering head injuries in a fall.
Parthenon Capital LLC and Goldman Sachs Capital Partners bought an 80 percent stake in Atkins Nutritionals the following October in a transaction valuing the company at $576 million. Atkins' estate retains a 16 percent stake and current executives own the remaining 4 percent, court papers show.

-Smith

Greenkey2
02-08-05, 19:15
*sigh* ANOTHER diet program bites the dust :rolleyes: Ah well, can't say I'm surprised.