A MAJOR global homewares brand that sells in 90 countries has filed for bankruptcy in the US.
Tupperware Brands, the US maker of food storage containers, said it will seek court permission to begin the process of selling the business.
1
Tupperware Brands has filed for bankruptcy in the USCredit: Getty Images – Getty
Last year, Tupperware Brands, a 78-year-old company, warned it could collapse if it didn’t raise new funding quickly.
The brand is facing slowing sales as it tries to target a younger audience.
The company’s shares fell more than 50 percent this week following reports that it was planning to file for bankruptcy.
In a statement to investors, Tupperware Chief Executive Laurie Ann Goldman said the business struggled amid a “challenging” overall global economic outlook.
Rising raw material prices, higher wages and transportation costs put the company in financial trouble.
Goldman added: “As a result, we have explored a number of strategic options and determined that this is the best way forward.
“This process should provide us with essential flexibility as we pursue strategic alternatives to support our transformation into a digital-first, technology-driven company that is better positioned to serve our stakeholders.”
Tupperware was founded in 1946 by Earl Tupper, who patented the hermetic sealing of containers.
The brand became famous for Tupperware parties, first held in 1948, which invited women to throw parties and sell products to friends, family and neighbors.
The brand was even used by the late Queen Elizabeth II, who reportedly kept her breakfast cereal in containers at Buckingham Palace.
No more Tupperware parties
By Ashley Armstrong, Business Editor
There will be no more parties at Tupperware. For several years there have been cracks in the once famous hermetically sealed brand.
It has now filed for bankruptcy after warning for the past year that it would fail if it did not raise additional funds.
While the unruly $700 million pile of debt was Tupperware’s ultimate loss, it was a case of death by a thousand cuts for a business that no longer stood out from the crowd.
When Early Tupper first invented it 78 years ago, Tupperware was considered a miracle product with a “burp seal” that kept food fresh by sealing in air.
However, Brownie Wise, a single mother and former saleswoman, was to launch the brand by hosting parties in her home to demonstrate Tupperware products and sell them to her guests.
The model worked so well that Tupperware used parties as a major sales driver and still has around 300,000 independent sellers.
Tupperware’s problems actually began in the 1980s when it lost the patents for its plastic food storage containers and suddenly faced competition from endless rivals.
The pace of competition has not slowed, and supermarkets and discounters are selling their cheaper versions that are more than a tenth of the price of Tupperware pots.
With one large Tupperware container costing £25 at full price, savvy shoppers have switched to cheaper alternatives.
Reuters reported last year that Tupperware’s biggest rival is actually the reusable plastic containers given to takeout customers.
Its sales have already fallen off a cliff – halved in the past decade – but recently its costs have skyrocketed as plastic materials, shipping and labor have become more expensive.
There may be brand nostalgia, but few customers would pay £20 more for a brand that no longer has any staying power or praise.
Since the company was first established, the model has been widely copied, with supermarkets and retailers releasing own-brand containers, often sold at lower prices.
For example, an 800ml Tupperware Fridgesmart container retails for £8.99, but you can get another container of a similar size for less.
Dunelm sell the same size tub for £1, while Wilko also have an 800ml container on their website selling for £1.29.
In 2020, Tupperware tried to resolve its balance sheet by restructuring a pile of debt.
But by April of last year, the company reported that its sales had fallen.
Sales fell from almost £402m in the final three months of 2020 to just over £241.5m in the final quarter of 2023.
It was also in danger of being delisted from the New York Stock Exchange after failing to file its annual results with the Securities and Exchange Commission.
The commission is an agency that operates independently of the US government and is designed to protect investors.
This was followed by a period of growth during the pandemic when people stayed at home and cooked for themselves.
OTHER COMPANIES THAT HAVE FILED FOR BANKRUPTCY OR ADMINISTRATION
Tupperware is not the first company to file for administration or go bankrupt in recent years.
Wilko fell into administration in August last year after PricewaterhouseCoopers (PwC) failed to find a rescue bidder.
The brand name has since returned to the high street, but after closing 400 stores.
The Body Shop fell into administration in February and 82 branches have since closed.
However, it was pulled out of bankruptcy after it was bought by capital development company Aurea earlier this month.
Paperchase, M&Co and Cath Kidston have also fallen into administration from early 2023.
Last month, cosmetics company Avon filed for bankruptcy after multiple lawsuits and financial problems.
What is bankruptcy?
Here’s everything you need to know…
Bankruptcy is a legal procedure in which individuals can erase their debts.
In the UK, bankruptcy is usually applied to individuals who owe more than they can pay.
During the bankruptcy period, individuals face restrictions such as the maximum amount they can borrow.
Someone is usually discharged from bankruptcy after 12 months, which means they are free of most debts.
However, their credit rating usually takes a hit that can affect whether they are approved for a mortgage, loan or personal loan.
Businesses that struggle to pay their debts usually face corporate insolvency.
Insolvency allows the company to either restructure and financially recover or liquidate and liquidate assets.
There are three main types of corporate insolvency, namely:
- administration
- Company Voluntary Agreement (CVA
- Liquidation
Do you have a money problem that needs to be solved? Get in touch by emailing [email protected].
Additionally, you can join our Sun Money Chat & Tips group on Facebook to share your tips and stories
Categories: Optical Illusion
Source: HIS Education