Update: Tupperware's shocking news that the company may not be able to survive probably should not be so shocking after all. Read our latest, more in-depth coverage of the company.
Tupperware in financial trouble
Kitchenware maker warns investors the company may not survive
A plastics company once much closer to the center of the American psyche is now warning the firm may no longer be able to stay in business.
Tupperware Brands Corp., famously created by Earl Tupper in the post-war 1940s, was both a middle-class flex and a sanctuary for mothers and wives, typically, to escape the house for a few hours back in the day.
But that was then, and this is now. And a lot has changed in the decades since Tupperware reached a zenith with its in-home demonstrations and parties.
So much so that the Orlando, Fla.- based company is telling the U.S. Securities and Exchange Commission there are questions about the company's ability to continue operating.
Tupperware said the firm has "engaged financial advisers to help improve its capital structure and remediate its doubts regarding its ability to continue as a going concern."
In other words, the company is hiring outside help stay afloat.
Tupperware is looking to raise additional cash and considering selling off and then leasing back property. The company also is "exploring right-sizing efforts, monetization of fixed assets, cash management, and marketing and channel optimization, to preserve and deliver additional liquidity."
Tupperware, which has long relied on individuals hosting parties to sell products, recently expanded on that model to start stocking products in Target stores. Tupperware has always been more expensive than retail counterparts, but also enjoyed a reputation of higher quality. The company's iconic designs helped carve out a niche in the food ware market for decades.
But plastic containers have evolved into somewhat of a commodity market, and Tupperware has attempted to remain viable at the top end of the kitchen segment.
"Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position," Tupperware CEO Miguel Fernandez said in a statement. "The company is doing everything in its power to mitigate the impacts of recent events, and we are taking immediate action to seek additional financing and address our financial position."
The company has yet to file its 2022 Form 10-K, or annual financial report, with the SEC. This delay means the company will probably violate rules governing its credit, Tupperware said. The New York Stock Exchange told Tupperware April 3 the firm was not in compliance with the exchange's rules by failing to file the 10-K.
"Due to the challenging internal and external business economics, coupled with the increased levels and cost of borrowings under its credit facility, the company currently forecasts that, if it is unable to obtain adequate capital resources or amendments to its credit agreement, it may not have adequate liquidity in the near term. As a result, the company has concluded there is substantial doubt about its ability to continue as a going concern," Tupperware said in a statement.
Tupperware has a catalog of more than 8,500 functional and utility patents covering food storage and kitchen products. The company claims a salesforce of 3.1 million people in 70 countries, including approximately 553,000 who are typically active at any one time.
The company, as of the beginning of last year, had 10,000 employees around the world. Company-owned manufacturing and distribution facilities are in Brazil, Greece, Indonesia, South Korea, Mexico, Portugal, South Africa and the United States. Leased manufacturing and distribution facilities are Belgium, China, Germany, India, Japan, New Zealand and Venezuela. There also is a commercial office in India, the company said in a previous SEC filing.
Tupperware also has said previously issued financial statements for both 2020 and 2021 and the first three quarters of 2022 "were materially misstated" and should no longer be relied upon.
Tupperware stock was begin battered as of one point April 10 down 48 percent at $1.28 per share on the NYSE.
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