Iconic Tupperware warns it could go out of business

NEW YORK – Kitchenware staple Tupperware is teetering on the brink of collapse, with its shares plunging nearly 50 per cent on Monday, the largest drop on record, to notch an all-time low.

Investors were spooked after the company, Tupperware Brands Corporation, said last Friday that it had hired financial advisers “to help improve its capital structure and remediate its doubts regarding its ability to continue as a going concern”.

Tupperware experienced a sizzling run-up during the first two years of the Covid-19 pandemic, with its share price soaring to US$37 as the lockdown boosted kitchenware sales. It has fallen on harder times since then, with the company blaming cash constraints caused by higher interest costs. On Monday, the stock closed at US$1.22 after diving 49.6 per cent.

Founded in 1946, Tupperware and its signature containers created the modern food storage business. It distributes its products in nearly 70 countries, mainly through independent representatives around the world.

But the 77-year-old brand has struggled to shake its staid image and attract younger shoppers in the face of new competition, while demand for home products has fallen. 

Last month, the company reported a loss from continuing operations of US$28.4 million (S$37.8 million) for 2022, although this narrowed from US$152.2 million in the previous year. Net sales last year fell 18 per cent to US$1.31 billion. 

Tupperware chief executive officer Miguel Fernandez said the company was seeking potential investors or financing partners to stay in business, and that it would not have enough cash to fund operations if it failed to do so.

The company was also considering cost-cutting measures, too, including slashing jobs and reviewing its real estate portfolio.

It is also working with Moelis & Company and Kirkland & Ellis to explore options for its nearly US$700 million (S$931.6 million) in long-term debt.

Meanwhile, the New York Stock Exchange warned that Tupperware’s stock is in danger of being delisted for not filing a required annual report.

Tupperware shares have sunk about 84 per cent since November last year when the company first raised concerns about its ability to continue operating. BLOOMBERG

With additional information from The Straits Times