Tupperware prepares to file for bankruptcy amid declining demand
What's the story
Tupperware Brands, a household name in food storage for nearly a century, is preparing to file for bankruptcy, as per Bloomberg. The move comes after prolonged attempts to revive the business in the face of diminishing demand. According to insiders who wished to remain anonymous, this decision follows a breach of debt terms by Tupperware and its subsequent engagement with legal and financial advisors.
Stock impact
Stock plummets by over 50%
The news of Tupperware's impending bankruptcy has significantly impacted its stock value. The company's shares had plummeted by more than 50%. This drastic drop reflects investor reactions to the company's financial struggles and uncertainty about its future.
Debt negotiations
Company grapples with over $700 million in debt
Tupperware is currently grappling with over $700 million in debt, leading to extensive discussions with its lenders on how to manage this financial burden. Earlier this year, lenders agreed to provide some leniency on the violated loan terms. However, despite these concessions, the company's financial health continued to deteriorate. A representative for Tupperware declined to comment on these developments.
Business challenges
Struggles and restructuring efforts
Tupperware has been facing business sustainability issues for several years now. In June, the company announced plans to shut down its only US factory and lay off nearly 150 employees. Last year, as part of a restructuring effort, it replaced CEO Miguel Fernandez and several board members with Laurie Ann Goldman taking over as the new CEO.
Company profile
Tupperware's history and business model
Tupperware was founded in 1946 by Earl Tupper, who introduced the public to its plastic products with a unique airtight seal. The brand gained popularity via sales parties hosted by suburban women. Despite changes over its nearly 80-year history, the company has continued to rely heavily on direct sales by over 300,000 independent salespersons as of 2022.