Sept 18 (Askume) – Tupperware Brands ( TUP.N ) filed for bankruptcy protection in Delaware late on Tuesday as the company was hit by sluggish demand for its once-popular colorful food storage containers.
Its popularity soared in the 1950s, when a generation of post-war women seeking empowerment and independence began hosting “Tupperware parties” in their homes and selling the containers.
However, its sales have declined in recent years as the company has struggled to sell more products in retail stores and online sales platforms. Tupperware has historically relied on independent sales representatives to sell its products, but the company said that strategy failed to appeal to modern consumers.
“Nearly everyone now knows what Tupperware is, but very few know where to find it,” Tupperware Chief Restructuring Officer Brian Fox wrote in a court filing in the U.S. Bankruptcy Court for the District of Delaware.
Tupperware repeatedly warned last month that it was at risk of bankruptcy because of a cash crunch, raising doubts about its ability to continue operating.
Court documents show the company owes $812 million in debt, much of which was purchased at a steep discount by distressed debt investors in July. Tupperware said these new creditors tried to use its debt position to seize intellectual property rights such as Tupperware’s brand, forcing the company to seek bankruptcy protection.
The company intends to continue operations and conduct a 30-day tender process to find a buyer for the entire company.
“Despite the recent restructuring of its balance sheet and temporary financial boost, Tupperware’s high debt load, declining sales and shrinking margins remain difficult to manage,” said James Gellert, executive chairman of financial analysis firm RapidRatings.
The company has spent several years trying to get its business back on track after reporting several quarters of declining sales.
Following the outbreak, rising costs of labour, freight and raw materials such as plastic resin also put pressure on its business.
The company’s shares saw wild volatility in 2023 amid a “meme stock” rally that saw retail investors coordinate on social media and bet on troubled companies where short-term interest was high.
According to the bankruptcy filing, Tupperware expects assets to be between US$500 million and US$1 billion and liabilities to be between US$1 billion and US$10 billion. The number of creditors ranges from 50,001 to 100,000.
The company has finalised a deal with lenders to restructure debt maturing in 2023 and signed an agreement with investment bank Moelis & Co to help explore strategic alternatives.
