The world changed and Tupperware did not. And now a bankruptcy court judge will determine the company's fate.
Tupperware Brands Corp., with a staggering number of creditors, is seeking bankruptcy court protection, a long-anticipated move for the plastic food container maker that has struggled under a heavy debt load for years.
A goal is to find a buyer willing to take over the company, which for decades had been part of the fabric of Americana, but lost footing in recent years.
By seeking Chapter 11 protection in U.S. Bankruptcy Court in Wilmington, Del., Tupperware aims to continue operations as the company reorganizes under judicial supervision.
Documents filed with bankruptcy court give a clearer picture regarding just how bad it is at the Orlando, Fla.-based maker of plastic foodware.
Tupperware lists assets of $679.5 million and liabilities of $1.204 billion. The company estimates the number of creditors at between 50,001 and 100,000.
Tupperware has been warning since 2022 that the company was facing financial troubles and might not make it.
"For decades, Tupperware's direct selling business model thrived, offering individuals across the globe — predominantly women — an opportunity to build their own business and develop valuable leadership and financial management skills, while also cementing the Tupperware brand in the hearts and homes of consumers," Tupperware Chief Restructuring Officer Brian Fox said in a court filing.
"In recent years, however, the historical strengths of a widespread direct selling model began to turn into weakness. The company's focus on its direct sales model ultimately came at the cost of developing an omnichannel strategy, or even modern e-commerce infrastructure to support its sales force," he said in the filing.
Tupperware was pushed into filing for Chapter 11 bankruptcy court protection after a self-described ad hoc group of lenders sought to take over the company in exchange for debt owed in a foreclosure process, according to a Sept. 9 letter to the Tupperware board from the law firm of Dechert LLP representing the debtors.
"The lenders under the revolving/term loan credit agreement and bridge loan credit agreement have valid, perfected liens on substantially all of the company's assets," the letter reads.
Tupperware, in a Sept. 14 response from its law firm of Kirkland & Ellis, raised concern that a "strict foreclosure approach could give rise to a host of lawsuits, by and against various parties, asserting that the assets were wrongfully transferred."
Three days later, on Sept. 17, Tupperware sought bankruptcy court protection despite a Sept. 16 warning from the ad hoc committee it would seek to block the move once the filing took place.
While some creditors are upset with Tupperware's decision to seek Chapter 11 protection, the company's move should not come as a surprise. The market has been preparing the company's obituary for years.
Tupperware has not even been able to keep up with the financial quarterly reporting requirements of a publicly traded company.
The company is in the process of closing its only U.S. manufacturing facility in Hemingway, S.C., after previously divesting ownership of the site in a sale-and-lease agreement to raise cash in 2023. The move is costing 148 jobs, and previously announced layoffs were scheduled to begin later this month and extend into early next year. Production, the company said at the time, was shifting to an existing company plant in Lerma, Mexico.
Tupperware was founded in 1942 by Earl Tupper and launched its first polyethylene food container in 1946. Brownie Wise joined the company in 1951 and launched the Tupperware party sales system that led to decades of sales success. But the company has come to rely on international sales as U.S. Tupperware parties went out of vogue.
Aside from the U.S. plant and the one in Mexico, the company has locations in China, India, Belgium, Brazil, South Korea, Mexico, Portugal and South Africa.
Laurie Ann Goldman took over as CEO in October 2023. Her career has included time as CEO of both shapewear company Spanx and Avon.
Chapter 11 shields the company, for now, allowing operations to continue while forestalling actions by debtors.
"Over the last several years, the company's financial position has been severely impacted by the challenging macroeconomic environment. As a result, we explored numerous strategic options and determined this is the best path forward. 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 better positioned to serve our stakeholders," Goldman said in a statement.
She also sought to assure Tupperware sales representatives and customers that the company will continue.
"Whether you are a dedicated member of our Tupperware team, sell, cook with, or simply love our Tupperware products, you are a part of our Tupperware family. We plan to continue serving our valued customers with the high-quality products they love and trust throughout this process," Goldman said.
Part of Tupperware's demise has been price. The company's product line, while viewed as being superior to other food containers, has suffered from intense competition from lower-priced options. It's not uncommon for Tupperware products to last decades, but consumers became comfortable with plastic containers that can be had for a small fraction of the cost.
These containers can range from the most inexpensive often costing less than a dollar to more middle-of-the road and sturdier offerings marketed under names like Rubbermaid. A single Tupperware product can easily cost more than an entire set of lower-priced containers.
While there once was prestige in hosting and buying Tupperware — it was a suburban middle-class financial flex in a way — those days are long gone. At least in the United States. As domestic sales faltered over time, the company placed more emphasis on overseas, using the same independent sales representative model that had been so successful in the United States.