Tupperware Brands and a few of its subsidiaries have filed for Chapter 11 bankruptcy and are actually on the lookout for a buyer, the food container maker said, after years of declining sales.
“Over the past few years, the company’s financial condition has been severely impacted by the difficult macroeconomic environment,” President and CEO Laurie Ann Goldman said Tuesday in a press release announcing the bankruptcy filing.
“We have therefore evaluated numerous strategic options and concluded that this is the best path forward,” Goldman added.
The company said it could seek court approval for a sale strategy of the corporate to guard its brand and “further advance Tupperware’s transformation into a digital, technology-focused company.”
The Orlando, Florida-based company said it could also seek permission to proceed operations and pay its employees and suppliers in the course of the bankruptcy proceedings.
“We plan to continue serving our valued customers throughout this process with the high-quality products they love and trust,” Goldman said.
The declaration of insolvency had been on the cards for several weeks. In mid-August, the group announced that it continued to have “significant liquidity problems” and doubted its ability to proceed its activities.
In its filing with the U.S. Bankruptcy Court for the District of Delaware, Tupperware listed assets starting from $500 million to $1 billion and liabilities starting from $1 billion to $10 billion.
The filing also stated that there have been between 50,000 and 100,000 creditors.
Tupperware shares closed at $0.5099 on Monday, well below $2.55 in December last yr. Trading within the stock was suspended on Tuesday.
‘Out of fashion
The 78-year-old company became famous within the Fifties and ’60s for its “Tupperware parties,” where friends would gather for food and drinks while an organization representative demonstrated the products.
Tupperware became synonymous with airtight plastic food containers, however the business model couldn’t keep pace with changing consumer demands.
The sector has been hit hard by the emergence of e-commerce and the rise in food delivery, and has also fallen victim to consumers’ shift to more environmentally friendly solutions.
“The party has been over for Tupperware for some time now,” said Susannah Streeter, head of cash and markets at Hargreaves Lansdown.
“Changes in shopper behavior have caused the containers to fall out of fashion as consumers have begun to break away from their plastic addiction and find more environmentally conscious ways to store food,” she said.
The company has tried to adapt to changing consumer habits by expanding its online sales and stepping into distribution agreements with chain stores, but has been unable to halt its decline.
Tupperware said the corporate has implemented a strategic plan to modernize its operations and increase efficiencies to drive growth after appointing a brand new management team last yr.
“The company has made significant progress and intends to continue this important transformation work.”
The company’s roots return to 1946, when chemist Earl Tupper “had a brilliant idea while building molds in a plastics factory shortly after the Great Depression,” based on Tupperware’s website.
Tupperware experienced a boom in the course of the Covid-19 pandemic before sales declined. In the group’s last annual results published in 2022, Tupperware reported sales of $1.3 billion, down 42 percent from five years earlier.
“Attempts to reach younger shoppers through sales in the US chain Target have not been as successful as hoped,” said Streeter.
“There is still a chance that a buyer will be found for the company, but with plastic being viewed as anything but fantastic by environmentally conscious consumers, reviving the brand is likely to be an uphill battle.”
