Bandung, IndonesiaSentinel.com — Tupperware, the iconic food container manufacturer, along with several of its subsidiaries, on the edge of bankruptcy. The company then filed for Chapter 11 bankruptcy protection in a U.S. court on Tuesday, September 17, 2024. The company has officially succumbed to dwindling demand for its signature storage containers and mounting financial losses.
The company saw a temporary boost in demand during the pandemic, as social restrictions forced people to cook at home, driving interest in Tupperware’s colorful, airtight plastic containers. However, this resurgence was short-lived. Rising post-pandemic costs of raw materials such as plastic resin, along with labor and transportation expenses, further squeezed Tupperware’s already shrinking profit margins.
“In recent years, the company’s financial position has been severely impacted by a challenging macroeconomic environment,” said CEO Laurie Goldman in a press release, as reported by Reuters on Wednesday, September 19.
Tupperware had been expected to file for bankruptcy after defaulting on debt obligations and hiring legal and financial advisors. The company reported estimated assets of between $500 million and $1 billion, and liabilities ranging from $1 billion to $10 billion, according to the bankruptcy filing in the U.S. Bankruptcy Court for the District of Delaware.
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Prior to filing for bankruptcy, Tupperware had been attempting to overhaul its business for roughly four years. Since the third quarter of 2021, the company experienced six consecutive quarters of declining sales, as high inflation continued to weigh on low- and middle-income consumers.
In 2023, Tupperware negotiated an agreement with lenders to restructure its debt and enlisted investment bank Moelis & Co to explore strategic alternatives for the company. However, despite these efforts, the company was unable to recover from its financial difficulties. Tupperware shares have plummeted 74.5% this year and last traded at just 51 cents.
U.S. Bankruptcy Protection Law
Chapter 11 bankruptcy protection, under U.S. bankruptcy law, allows a company to restructure its debt while continuing to operate its business. Unlike Chapter 7 bankruptcy, which involves liquidation of assets, Chapter 11 gives a business the opportunity to reorganize and develop a plan to pay back creditors over time.
This protection can be essential for companies seeking to recover from financial distress without shutting down entirely. “This process is meant to provide us with essential flexibility as we pursue strategic alternatives to support our transformation into a digital-first, technology-led company,” Goldman added.
(Raidi/Agung)
