Household name Tupperware Brands is preparing to file for bankruptcy and could do so as soon as this week, according to sources with knowledge of the plans, quoted by Bloomberg. The brand, known for its iconic food storage containers, is set to enter court protection after breaching the terms of its debt repayment and has enlisted legal and financial advisors, the sources said. This follows negotiations held between Tupperware and its lenders over how to manage more than US$700 million (S$907 million) in debt. The plans are not final and could change. A representative for Tupperware declined to comment, Bloomberg reported.
Recent struggles led to decision
Tupperware products were first introduced to the public in 1946, after founder Earl Tupper invented their flexible airtight seal. It exploded in popularity in the U.S. through home parties hosted by sellers, before attaining global fame. However, the 77-year-old homeware brand has been struggling in more recent times, with demand for its products waning following the Covid-19 pandemic. In 2022, it reported a US$28.4 million (S$36.8 million) loss from continuing operations as net sales fell 18 per cent, The Straits Times reported. In April 2023, Tupperware shares plummeted nearly 50 per cent after the brand published a filing to address doubts that it was going out of business. In 2023, the brand also replaced its chief executive officer Miguel Fernandez and several board members in a bid to turn the business around, Reuters reported. However, in June, Tupperware announced its plans to shutter its only factory in the United States and lay off almost 150 employees, according to The New York Post.
Financial woes and leadership changes
The financial troubles of Tupperware have been mounting over the years. The company has been grappling with a significant debt load of over US$700 million (S$907 million). Despite efforts to renegotiate terms with lenders, the brand has struggled to find a sustainable path forward. The leadership changes in 2023, including the replacement of CEO Miguel Fernandez and several board members, were part of a broader strategy to revitalise the company. However, these changes have not been sufficient to stem the tide of financial losses and declining sales.
Impact of the Covid-19 pandemic
The Covid-19 pandemic has had a profound impact on Tupperware’s business model. The brand, which once thrived on in-person home parties, found itself at a disadvantage as social distancing measures and lockdowns became the norm. The shift in consumer behaviour towards online shopping and the increased competition from other homeware brands further exacerbated Tupperware’s challenges. The company’s attempts to pivot to a more digital-focused strategy have been met with mixed results, contributing to its current financial predicament.
Future implications
The potential bankruptcy filing of Tupperware marks a significant moment for the brand and its stakeholders. If the company proceeds with the filing, it will enter court protection, which could lead to a restructuring of its debt and operations. This move may also have broader implications for the homeware industry, as other brands may reassess their business models in light of Tupperware’s struggles. The future of Tupperware remains uncertain, but the company’s efforts to navigate its financial challenges will be closely watched by industry analysts and consumers alike.
