Tupperware has spent decades as a household name for its plastic storage containers used for various needs. However, the company is warning that it could soon go out of business.
Tupperware Brands Corporation announced it had serious concerns over the company’s ability to continue operating. The company said it has “substantial doubt about its ability to continue as a going concern.” Tupperware stock fell 50% to $1.22 per share after the public announcement and a securities filing. The company’s stock has fallen about 70% this year.
“Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position,” said Miguel Fernandez, President and Chief Executive Officer of Tupperware Brands. “The Company is doing everything in its power to mitigate the impacts of recent events, and we are taking immediate action to seek additional financing and address our financial position.”
Part of Tupperware’s strategy to turn the company around includes selling real estate and trimming areas of the business. The company has stated it will take steps to improve its working capital, where it has seen cash constraints from increased interest burden from a high-interest rate environment.
“This amended agreement allows us to continue to execute on our dual strategies of fixing the core and expanding access to the brand during this period of unusual macroeconomic volatility,” said Mariela Matute, Chief Financial Officer of Tupperware Brands. “We remain confident that our strategies are the right ones for Tupperware in today’s global consumer environment, and we appreciate the support of our lenders.”
Tupperware saw a surge in success during the pandemic as more people stayed home and cooked meals. However, analysts have speculated that the plastic container brand has lost its edge and fallen out of favor with younger consumers. According to CNN:
Several issues are hurting Tupperware, including a “sharp decline in the number of sellers, a consumer pullback on home products, and a brand that still does not fully connect with younger consumers,” according to Neil Saunders, retail analyst and managing director at GlobalData Retail.
Saunders said Tupperware is in a “precarious position” financially because it’s struggling to grow sales, and because it’s asset-light it doesn’t have “much capacity to raise money.”
“The company used to be a hotbed of innovation with problem-solving kitchen gadgets, but it has really lost its edge,” he said.
Tupperware recently closed a deal with Target to sell its products and improve the brand’s prominence in large retail stores. Fernandez said in a LinkedIn post, “We’re reinventing the business model our company has operated with for over 75 years to bring more products to more consumers through an omnichannel strategy while continuing to fortify our direct selling business. We’re selectively investing time and resources to drive sustainable growth of both new and core business channels.” He continued, “For more than 75 years, we’ve been the life of the party in homes around the world. We want to continue to have a seat at dining tables and a spot on kitchen counters for years to come.”
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