By Savyata Mishra and Dietrich Knauth
(Reuters) – Tupperware Brands filed for bankruptcy protection in Delaware late on Tuesday, succumbing to mounting losses due to weak demand for its once-popular, colorful food storage containers.
Its popularity exploded in the 1950s, when baby boomers hosted “Tupperware (NYSE:) parties” at their homes to sell the containers in their quest for empowerment and independence.
However, its sales have plummeted in recent years as the company struggled to get more of its products into retail stores and online sales platforms. Historically, Tupperware has relied on independent sales representatives to sell its products, but that strategy has failed to reach modern consumers, according to the company.
“Almost everyone now knows what Tupperware is, but fewer people know where to find it,” Tupperware's chief restructuring officer, Brian Fox, wrote in a filing with the U.S. Bankruptcy Court for the District of Delaware.
Last month, Tupperware raised questions about its ability to stay in business after repeatedly signaling the risk of bankruptcy due to liquidity constraints.
The company has $812 million in debt, much of which was acquired by distressed investors at a deep discount in July, according to court documents. Those new lenders had attempted to use their debt position to seize Tupperware’s assets, including its intellectual property such as its brand, putting pressure on the company to file for bankruptcy protection, Tupperware said.
The company intends to continue operations and conduct a 30-day bidding process to find a buyer for the entire company.
“Even with a recently restructured balance sheet and a temporary financial boost, Tupperware's high leverage, declining sales and shrinking profit margins were too much to overcome,” said James Gellert, chief executive of financial analysis firm RapidRatings.
The company has been trying to turn its business around for years after reporting several quarters of declining sales.
A post-pandemic surge in costs for labor, freight and raw materials like plastic resin also put pressure on his business.
The company's stock has seen wild swings in 2023 amid rallies in “meme stocks,” where retail investors coordinate on social media and focus their bets on struggling companies with high short interest.
Tupperware has between $500 million and $1 billion in assets and between $1 billion and $10 billion in liabilities, according to bankruptcy documents. The number of creditors ranges from 50,001 to 100,000.
The company had finalized an agreement with its lenders in 2023 to restructure its debt obligations and signed with investment bank Moelis (NYSE:) & Co to help explore strategic options.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);
