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Fitness Tycoon Jenny Craig Turns Weight Losses into Profit by Shaping Her Clients' Bottom Line

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As a child in the late ’40s, Jenny Craig was so skinny that her mother insisted she walk home from school every day to eat a home-cooked lunch. But by 1969, when Craig was well on the other side of the kitchen—as the 37-year-old mother of two—she found herself facing the opposite problem. “I used to look in the mirror and cry,” she says, remembering the pudgy reflection. “I would just cry and say, ‘What did you do to yourself?’ ” Whatever it was she did—and Craig puts the blame on a problem pregnancy—it may have been the best thing that ever happened to her. Desperate to regain her slim physique, Jenny, a dental assistant married to a building contractor, signed up for a calisthenics class at a local New Orleans gym and began to watch her diet. She cut down on portion sizes and took it easy on desserts. Within three months, she shed 30 lbs.—and, in the process, found a new career.

“I became fascinated by how weight affected people’s self-image,” says Craig, 57, who today co-owns, with her second husband, Sid Craig, more than 420 Jenny Craig International Weight Loss Centres in four countries. With annual revenues of more than $400 million (and an expansion rate that boasts four new centers each week), Jenny Craig is fast becoming the McDonald’s of weight reduction. Her down-to-earth advice has also attracted a celebrity clientele including Craig spokespersons Elliott Gould and Susan Ruttan.

Like everybody else who shells out $185 for the 16-week course, Ruttan and Gould received counseling and a prepackaged eating regimen (approximately $10 per day) that gradually expands to include outside food choices. “People think of diets as something you go on and off,” says Jenny. “Ours is a life-style.” That’s a lesson Jenny learned while growing up in New Orleans, the youngest of six kids born to Gertrude and James Guidroz. Although her boat captain father also moonlighted as a carpenter, money was always tight, and Jenny’s mother kept the family fed with lots of homegrown—and healthful—foods. “She did it out of economic necessity,” Jenny says.

With only vague dreams of “helping others,” Jenny dropped out of Southwestern Business School to work for a dentist. She found her true calling when the co-owner of the club where she had been working out offered her a job. Still, it was a potential rival who became her strongest ally: In 1970, Sid Craig came to New Orleans to open a branch of his California-based Body Contour exercise centers. Jenny, thinking of a possible franchise, signed on to help him. With her input, recalls Sid, 57, “it became a new company.”

Their personal relationship evolved more slowly. “It was the furthest thing from my mind and I’m sure from hers,” insists Sid, who, like Jenny, was then wed to another. By 1976, however, both were divorced and, he says, “all of a sudden it just hit.” They were married in 1979 and in 1982 broke from their other business partners and sold out to a competitor.

Legally restrained by a noncompete clause in their contract from opening a health center in the U.S. for two years, Sid and Jenny decided to test their concept in Australia. “The U.S. and Australia are so different, they’re like two countries divided by the same language,” says Craig. Still, they were successful enough so that more than 100 Jenny Craig Centres are now thriving down under.

Conquering weight-obsessed America was a piece of (low-cal) cake. Arriving in L.A. in 1985, the Craigs simultaneously opened 14 centers; today their U.S. holdings include 285 centers in 18 states. Sid and Jenny supervise them all from a Del Mar office so lavish that it boasts an extensive collection of 17th-and 18th-century art, and a spectacular 10,000-square-foot beachfront house nearby. The couple, who have five grown children and two grandchildren between them, also own a ski house in Aspen, a $3 million JetStar and six Thoroughbred racehorses.

Too thin and too rich? The Craigs quickly point out that they’re not spending all their money on expensive toys. They are considering establishing a foundation of some $25 million to benefit the homeless, and they donate generously to environmental efforts and other pet causes. A health clinic in Mexico already receives their funding, and they were key sponsors of the Australian Olympic team.

But they never forget their business is fitness. The Craigs set aside at least one hour to exercise each day and stick to the low-fat, high-fiber diet their centers recommend. Jenny says she fully expects to live to be “at least 100.” If she doesn’t, she adds, “it’s not going to be because I neglected my body.”

—Cynthia Sanz, Leah Feldon Mitchell in Los Angeles