The 77-year-old food storage business is facing a bleak future as it races to find new financing.
Image source, Getty ImagesTupperware, the US-maker of food storage containers, has warned that it could go bust unless it can quickly raise new financing.
Shares in the 77-year-old firm plunged on Monday after it said there was “substantial doubt about its ability to continue as a going concern”.
Tupperware has been attempting to reposition itself to a younger audience.
However, it has failed to stop a slide in its sales.
The firm became well-known in the 1950s and 1960s when people held “Tupperware parties” in their homes to sell plastic containers for food storage.
Tupperware still employs a direct sales force – who earn a percentage of all the goods they sell – as well as selling goods on its website.
It recently started selling its products in US retail chain Target in an attempt to entice younger shoppers.
It has also expanded its range into cooking products, such as a grill that works in a microwave.
At the time, Miguel Fernandez, Tupperware’s chief executive – its third in five years – said he imagined the grill “for someone who lives in an apartment in New York City and you can’t really do outdoor grilling but you can use this”.
Image source, Getty Images
In a statement, Tupperware said that its shares were in danger of being delisted from the New York Stock Exchange because it had not yet filed its annual report.
It also warned that it had to renegotiate its loans after already amending its loan agreements three times since August 2022.
Tupperware said it was struggling with higher interest costs on its borrowings while it attempts to turn the business around.
The company said it “currently forecasts that it may not have adequate liquidity in the near term”, adding that it “has therefore concluded that there is substantial doubt about its ability to continue as a going concern”.
In addition, Tupperware said that its financial results for 2021 and 2022 as well its interim figures in 2021 and the first three months of 2022 had been “misstated” due to how the firm accounted for taxes and leases.
Tupperware’s share price dropped by nearly 50% on Monday.
The company said it was working with financial advisers to secure more money and investment. It is also examining whether it can sell property and cut jobs.
Tupperware was founded by Earl Tupper, an American chemist, in 1946.
The polyethylene air-tight and water-tight products – with their double-sealed lid – were sold in department stores but were not immediately successful because potential customers were not sure how to use them.
People were used to glass and ceramic products and the new Tupperware container had to be “burped” to expel air when being sealed.
A saleswoman called Brownie Wise – who was already selling cleaning products door-to-door at home parties – started selling Tupperware herself.
She used home demonstrations to find customers and recruited other salespeople to sell the goods.
She was recruited as a vice president of marketing at Tupperware by Mr Tupper, helping to fuel growth at the business through parties which also allowed women to earn income.
However, the founder and his vice president reportedly clashed over strategy and in 1958, Mr Tupper fired Mrs Wise. She sued the company and won a year’s salary. Mr Tupper went on to sell the business.