The iconic kitchen brand Tupperware and some of its subsidiaries have filed for Chapter 11 bankruptcy in the United States, as the company struggles to stay afloat amid declining sales of its products.
The Orlando-based company said on Sept. 17 that it will seek court approval to initiate a sale process for the business and to continue operations during the bankruptcy proceedings.
Laurie Ann Goldman, CEO of Tupperware, said the process will enable the company to pursue “strategic alternatives” to advance its transformation into a “digital-first, technology-led” business.
“As a result, we explored numerous strategic options and determined this is the best path forward.”
Goldman said the company will continue to offer high-quality products to its customers throughout this process. Tupperware noted that there will be no changes to its independent sales consultant agreements.
Tupperware has been trying to turn its business around for about four years, after reporting a decline in sales for six consecutive quarters since the third quarter of 2021, as sticky inflation continued to dissuade its low- and middle-income consumer base.
Founded in 1946, the maker of the iconic food-storage containers reported a $28.4 million loss from continuing operations in 2022, following a $152.2 million loss reported in the previous year.
Tupperware’s net sales declined by 18 percent in 2022, and the company reported a total debt of $705.4 million for that year. It attributed the decline to lower sales and operating margins and a higher effective tax rate.
Last year, Tupperware raised “substantial doubt” about its ability to continue operating, and said that it had engaged with financial advisers to secure supplemental financing to improve its capital structure.
The company said at the time that it was in talks with potential investors or financing partners and was reviewing its portfolio of real estate for “potential dispositions or sale-leaseback transactions.”
Tupperware said it was exploring “right-sizing efforts, monetization of fixed assets, cash management, and marketing and channel optimization” to deliver additional liquidity within that year.
“If the company is unable to obtain adequate capital resources or amendments to its credit agreement, management anticipates that it will have inadequate liquidity to fund its operations and satisfy its obligations as currently anticipated in the near term pursuant to its current business plan,” the filing states.
In August 2023, Tupperware finalized an agreement with its lenders to restructure its debt obligations, and it signed investment bank Moelis & Co. to help explore strategic alternatives.
