Tupperware, a household brand once so popular it became the name of an entire product category, filed for Chapter 11 bankruptcy Tuesday as consumers’ evolving shopping behaviors and increased competition led to slumping sales.
“Over the last several years, the Company’s financial position has been severely impacted by the challenging macroeconomic environment,” Laurie Ann Goldman, president and chief executive of Tupperware, said in a statement. “As a result, we explored numerous strategic options and determined this is the best path forward.”
Tupperware, which came close to finding itself in this position last year, will seek court approval to start a sale process for the business to protect its brand and advance its “transformation into a digital-first, technology-led company,” the company said.
The Orlando-based food storage company will also seek court approval to continue operating during the bankruptcy process, including continuing to pay employees, as well as compensating vendors and suppliers for goods and services provided on or after the filing date.
“We plan to continue serving our valued customers with the high-quality products they love and trust throughout this process,” Goldman added.
A retailer or another homewares group may be interested in purchasing the brand, said Neil Saunders, managing director of analytics firm GlobalData, but only for a low price, given the brand’s waning growth prospects.
The news comes just more than a year after the company narrowly avoided bankruptcy. In August 2023, four months after Tupperware expressed “substantial doubt” about its viability amid declining sales, the company announced a deal to restructure its debt. Tupperware reduced its interest payments on debt by $150 million, secured a borrowing capacity of up to $21 million, cut its debt by $55 million and got a deadline extension to repay $348 million in interest and fees to the 2027 fiscal year.
Executives were “confident” in the restructuring plan, chief financial officer Mariela Matute said in a news release at the time.
A year later, the plan didn’t have legs to sustain the company. In June, Tupperware reported it was shuttering its only U.S. facility, in Hemingway, S.C., and would start laying off almost 150 employees later this month and through early next year, Retail Dive reported.
Founded in 1946 by chemist Earl Tupper, the food container brand quickly became a household name as women began selling the product in their homes in what was coined Tupperware parties.
But the business model that once enabled the company’s rise eventually led to its fall. Despite adapting to direct-to-consumer sales and stocking shelves in Target, increased competition and diminishing nostalgia around the brand led to declining sales.
Consumers are also seeking inexpensive alternatives, Saunders said. “Competition has intensified over recent years with the rise of cheaper platforms like Temu, and with retailers like Target innovating more with their own home storage and kitchenware brands,” he said.
(c) Washington Post