Huge global homeware brand files for bankruptcy after 78 years
A HUGE global homeware brand which sells in 90 countries has filed for bankruptcy in the US.
Tupperware Brands, the US maker of food storage containers, said it will ask for court permission to start a sales process of the business.
Last year, Tupperware Brands, a 78-year old firm, warned it may go bust unless it could quickly raise new funds.
The brand has been facing slowing sales as it tries to target a younger audience.
The company's shares have fallen by more than 50% this week after reports it was planning to file for bankruptcy.
In a statement to investors, Tupperware's chief executive Laurie Ann Goldman, said the business had struggled amidst a "challenging" overall global economic outlook.
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The rising cost of raw materials, higher wages and transportation costs has seen the company struggle financially.
Goldman added: "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."
Tupperware was founded in 1946 by Earl Tupper, who patented the containers' airtight seal.
The brand became well-known for its Tupperware Parties, first held in 1948, which called on women to host parties and sell the products to friends, family and neighbours.
The brand was even used by the late Queen Elizabeth II, who reportedly kept her breakfast cereals in the containers at Buckingham Palace.
No more parties at Tupperware
By Ashley Armstrong, business editor
There will be no more parties at Tupperware. For a number of years there have been cracks in the once famously airtight brand.
It has now filed for bankruptcy after warning for the past year that it would go bust unless it could raise extra funds.
While an unmanageable $700million debt pile has been Tupperware's ultimate undoing, it has been a case of death by a thousand cuts for the business that no longer stood out from the crowd.
When Early Tupper first invented it 78 years ago, Tupperware was considered a miracle product with a “burping seal” that kept food fresh by locking out the air.
However it took Brownie Wise, a single mother and former saleswoman, to propel the brand by hosting parties at her home to demonstrate Tupperware products and sell them to her guests.
The model worked so well that Tupperware used parties as its main sales driver and it still has around 300,000 independent salespeople.
Tupperware’s problems really started in the 1980s when it lost the patents to its plastic food storage containers and suddenly it faced competition from endless rivals.
The pace of competition has not eased up, with supermarkets and discount stores selling their own cheaper versions that are more than a tenth of the price of Tupperware pots.
With one large Tupperware container costing £25 at full price, savvy customers have switched to cheaper alternatives.
Reuters had reported last year that Tupperware’s biggest rival was actually the reusable plastic containers given to restaurant takeaway customers.
Its sales have already fallen off a cliff - halving in the past decade - but recently its costs have rocketed as the price of its plastic materials, shipping and labour have all become more expensive.
There might be nostalgia for the brand, but few shoppers would pay £20 more for a branding that no longer has power or kudos.
Since the company was first established, the model has been widely copied, with supermarkets and retailers releasing their own-brand containers, which often sell for cheaper prices.
For example, Tupperware's Fridgesmart 800ml container sells for £8.99 but you can get a similar size container cheaper elsewhere.
Dunelm is selling a same-size tub for £1 while Wilko also has an 800ml container on its website selling for £1.29.
In 2020 Tupperware looked to address its balance sheet by restructuring its debt pile.
But by April last year, the company was reporting that its sales had tumbled.
Sales fell from nearly £402million in the last three months of 2020 to just over £241.5million in the final quarter of 2023.
It was also in danger of being delisted from the New York Stock Exchange after failing to file its annual results with the Securities and Exchange Commission.
The commission is an agency that works independently from the US government and is designed to protect investors.
It followed a period of growth during the pandemic as people stayed at home and cooked for themselves.
OTHER FIRMS THAT HAVE FILED FOR BANKRUPTCY OR ADMINISTRATION
Tupperware is not the first firm to file for administration or go bankrupt in recent years.
Wilko plunged into administration in August last year as PricewaterhouseCoopers (PwC) failed to find a rescue bidder.
The brand name has since returned to the high street though after closing 400 stores.
The Body Shop collapsed into administration in February, with 82 branches closing thereafter.
However, it was pulled out of going bust after being bought out by growth capital firm Aurea earlier this month.
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Paperchase, M&Co and Cath Kidston have all fallen into administration since the start of 2023 too.
Last month, cosmetics company Avon filed for bankruptcy after multiple lawsuits and financial struggles.
What is bankruptcy?
Here is everything you need to know...
Bankruptcy is a legal process whereby individuals can have their debts wiped.
In the UK, bankruptcy is typically applied to individuals who owe more than they can pay.
During a bankruptcy period, individuals face restrictions such as a maximum amount they can borrow.
Someone is usually discharged from bankruptcy after 12 months which means they are free from most debts.
However, their credit rating usually takes a hit which can impact whether they are approved for mortgages, credit or a personal loan.
Businesses who are struggling to pay off their debts usually face corporate insolvency.
Insolvency lets a company either restructure and recover financially or be wound up and its assets liquidated.
There are three main types of corporate insolvency, which are:
- Administration
- Company Voluntary Arrangement (CVA
- Liquidation
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