Tupperware on the brink of collapse
The iconic US maker of food storage containers has warned that it could go bust unless it can raise new funding.
Shares in the 77-year-old firm fell by almost 50% on Monday after it warned of “substantial doubt” about its “ability to continue as a going concern”. Shares are worth about US$1.30 now, compared to $20.15 this time last year.
Tupperware was set up by chemist Earl Tupper in 1946. The lightweight, non-breakable plastic containers were inspired by the seal-tight design of paint cans.
At first, Tupperware products didn’t sell well in stores – this lead to “Tupperware parties” in the 1950s and ‘60s were the products were demonstrated by a mostly-female sales force.
Tupperware had been attempting to reposition itself to a younger audience but has failed to stop a slide in its sales.
The company still employs a direct sales force – who earn commission on the goods they sell – as well as selling products on its website.
Tupperware was warned on 3 April its shares were in danger of being delisted from the New York Stock Exchange because it had not yet filed its annual report.
The company’s board of directors issued a statement on 7 April saying that it was “actively engaged with management to improve the company’s capital structure and near-term liquidity” and that the firm had “engaged financial advisors to assist in securing supplemental financing, and is engaging in discussions with potential investors or financing partners”.
In a bid to survive, Tupperware recently started selling its products in US retail chain Target as well as to other retailers around the world. It also expanded its range into cooking products, such as a grill that works in a microwave.
Miguel Fernandez, president and chief executive officer of Tupperware Brands, said on 7 April: “Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position.
“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.”