Tupperware files for bankruptcy under Chapter 11 on Tuesday. Some of the units of the company also had filed for bankruptcy. The iconic food storage containers, which once were a staple of home kitchens, have seen declining demand. Monetary losses have mounted that have spurred bankruptcies too.
Tupperware files for bankruptcy as the brand did witness a brief pandemic boon as people began to cook more from the comfort of home. Demand for its vibrant, airtight containers picked up during the pandemic. After the pandemic, the firm faced a rise in raw material prices, including plastic resin. The company faced an enhancement in labour and freight costs after the pandemic.
All these measures dealt a huge blow to the profit margins of Tupperware. Tupperware CEO Laurie Goldman attributed the financial issues of the firm to the macroeconomic environment. As Tupperware files for bankruptcy, she said:
“Over the last several years, the company’s financial position has been severely impacted by the challenging macroeconomic environment.”
Tupperware files for bankruptcy: It was pre-planned
Tupperware had planned to file for bankruptcy since the debt levels of the firm surpassed its terms. The firm hired legal and finance advisors to guide them through the filing process of bankruptcy. The firm stated that its assets were between $500 million and $1 billion. The liabilities were estimated at between $1 billion and $10 billion.
Bankruptcy petitions were filed with the U.S. Bankruptcy Court for the District of Delaware. The company has between 50,001 and 100,000 creditors. Tupperware has experienced sales declines for over four years. Since Q3 of 2021, sales have declined for six consecutive quarters. Inflation had also been causing woe to Tupperware’s low and middle-income customers.
Sticky inflation had also made these customers pause before buying products of Tupperware. During 2023, Tupperware restructuring obligations with the lenders. Tupperware agreed with the lenders to mitigate financial burden. Tupperware hired investment bank Moelis & Co to find strategic alternatives.
The company has been trying to undergo a business turnaround since four years. It has explored new strategies to revive the business. Tupperware has filed for bankruptcy, marking a great fall for this once-great brand. Company Background: The company was known for producing colorful and tough food storage containers. The brand has failed to achieve relevance in the marketplace today.
Increased competition was a major reason that had reduced its sales. Changing consumer habits did not help either. The petition for bankruptcy aims to assist Tupperware in dealing with financial stress and debt burdens.
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