By Janet H. Cho
Tupperware Brands stock tumbled 58% after the maker of colorful plastic food containers filed for bankruptcy, acknowledging that a turnaround effort had faltered.
The company filed in U.S. Bankruptcy Court in Delaware late Tuesday, saying it was the best path forward. The step comes after the company named new management in the past year and put in motion a strategic plan to revamp operations and broaden its sales efforts.
"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," President and CEO Laurie Ann Goldman said.
The stock is down nearly 75% this year and down 71% over the past 12 months.
Tupperware has been operating under numerous challenges including declining demand and greater competition over the last several years. The Orlando, Fla.-based company said it plans to keep operating during the court proceedings and sell its products through sales consultants, retail stores, and online channels.
Tupperware's revenue was about $1.1 billion in fiscal 2023, but it had about $811.8 million in funded debt obligations.
In late March, Tupperware postponed filing its annual report for 2023, citing internal challenges and a shortage of accountants, after reporting liquidity issues and warning about its ability to continue operating in April 2023.
Last month, Tupperware warned it wouldn't be able to file its quarterly financial report on time for the quarter ended June 29, saying it was experiencing "significant liquidity challenges, and continues to have substantial doubt about its ability to continue as a going concern."
It also reported that its accounting department had seen "significant attrition, including the recent departure of its Chief Financial Officer, " and other issues. CFO Mariela Matute left on July 31. It previously made similar warnings about late filings on March 29 and May 10.
In its court papers, Tupperware reported assets of between $500 million and $1 billion and liabilities of $1 billion to $10 billion.
The company was founded in 1946 by chemist and inventor Earl Tupper, who developed the plastic containers and leakproof lids that are still sold worldwide today. But business took off after a saleswoman named Brownie Wise developed the Tupperware party as a way to show off the products and hired other women to spread the word. She was the first woman to appear on the cover of Business Week, as the subject of a 1954 cover story.
Tupperware now employs more than 5,450 people in 41 countries and has a global sales force of more than 465,000 independent sales consultants in nearly 70 counties. Its strength in direct sales, however, meant it didn't have much of an e-commerce infrastructure, among other weaknesses.
In the third quarter 2023, Tupperware reported a net loss of $54 million and revenue of $259.6 million, down 14% from a year earlier.
Write to Janet H. Cho at janet.cho@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
September 18, 2024 14:37 ET (18:37 GMT)
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