The iconic home furnishings company Tupperware Brands has gone bankrupt. The company has gone bankrupt due to falling demand and increasing losses. The company has applied for bankruptcy protection in the US Bankruptcy Court. Chapter 11 has also been cited for this.
The company, known for its various food storage containers, listed estimated assets of $500 million to $1 billion and estimated liabilities of $1 billion to $10 billion in its bankruptcy filing. Tupperware’s struggle to maintain sales momentum comes after a brief surge during the Covid-19 pandemic, when people turned to its products for home food storage.
However, the rise in raw material costs, labour and freight expenses following the pandemic further eroded the company’s margins. In August, Tupperware expressed substantial doubt about its ability to continue as a going concern for the fourth time since November 2022, citing liquidity constraints.
Filing Bankruptcy After Debt Struggles
Tupperware was in negotiations with lenders over its more than $700 million in debt before opting for bankruptcy protection. The company violated the terms of its loan, leading to the decision to file Chapter 11. The kitchen utensil maker, which dominated the food storage market for decades, has been struggling to stay afloat since 2020, repeatedly casting doubts over its viability.
In its latest restructuring effort, the company has announced plans to close its only U.S. factory and layoff approximately 150 employees by June this year, a significant retrenchment effort to ease the company’s financial problems.
What will happen next?
Tupperware’s bankruptcy filing is a significant step toward restructuring its debt and operations. The company will aim to reorganize and revive its business under court supervision. Industry analysts say Tupperware’s failure to adapt to changing consumer preferences and the growing trend of online shopping are reasons for its downfall. Tupperware’s future remains uncertain as it goes through the bankruptcy process.
