By Delisa Thwala
Over 600 local Tupperware dealers can heave a sigh of relief for now, as the new changes will not be affecting them any time soon.
Earlier this week Tupperware Brands (TUP.N) filed for bankruptcy protection in Delaware late on Tuesday, succumbing to mounting losses due to poor demand for its once popular colorful food storage containers.
Its popularity exploded in the 1950s as women of the post-war generation held ‘Tupperware parties’ at their homes to sell the containers as they sought empowerment and independence.
However, its sales slumped in recent years as the company struggled to place more of its products in retail stores and online sales platforms.
Tupperware has historically relied on independent sales representatives to move its products, but that strategy has failed to reach modern consumers, according to the company.
Considering filing for bankruptcy, Tupperware has reassured stakeholders that it intends to maintain operations during the legal proceedings.
The company seeks the court’s approval to protect its brand and facilitate its transformation into a digitally focused, technology-driven entity.
Laurie Ann Goldman, the Chief Executive Officer of Tupperware, reiterated the importance of this transition, stating that the process would allow Tupperware to better position itself to meet the needs of its stakeholders, in an ever-evolving marketplace.
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Local Tupperware Distributor Gcinekile Mamba said that nothing has been communicated with them and they are continuing with work.
“We are continuing with work and sales are going,” she said.
Worth mentioning is the Mbabane and Manzini Tupperware Branch distributors is still operating and selling products.
Some suppliers have been seen on Facebook advertising their products despite the ongoing bankruptcy news.
Another distributer on Facebook said; “Maybe sells will plummet now because Tupperware might fade away and people may want to have one for keeps ,”
Another said, “We cannot be the generation that failed Tupperware, we are such a disappointment,”
Meanwhile Distributor in Manzini Celiwe Shongwe said sales long dropped as people now preferred other options of ware.
“There was a time where sales were good and the brand was popular but over the years, it has dropped especially during Covid-19,” she said.
In addition, she said Tupperware had also become expensive to stock, meaning they had to increase their selling prices which then resulted in low sales.
Tupperware, is known the world over for its plastic food storage containers, finally filed for bankruptcy after years of falling popularity and financial troubles.
Chapter 11 bankruptcy allows companies to solve their financial problems by restructuring.
This process is meant to provide them with essential flexibility as they pursue strategic alternatives to support transformation into a digital-first, technology-led company.
“Nearly everyone now knows what Tupperware is, but fewer people know where to find it,” Tupperware Chief Restructuring Officer Brian Fox wrote in a court filing in the U.S. Bankruptcy Court for the District of Delaware.
Tupperware last month raised doubts about its ability to remain in business after flagging bankruptcy risk several times due to liquidity constraints.
The company has $812 million in debt, much of which was purchased by distressed debt investors at a deep discount in July, according to court filings.
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Those new lenders had sought to use their debt position to seize Tupperware assets including its intellectual property such as its brand, pushing to the company to seek bankruptcy protection, Tupperware said.
The company intends to continue operations and conduct a 30-day bidding process to find a buyer for the entire company.
“Even with a recently restructured balance sheet and a temporary financial boost, Tupperware’s high leverage,
declining sales and shrinking profit margins were too much to overcome,” said James Gellert, executive chairman at financial analytics firm Rapid Ratings.
The company has been trying to turn its business around for years after reporting several quarters of falling sales.
A post-pandemic jump in the costs of labor, freight and raw materials such as plastic resin also pressured its business.
The company’s stock saw wild swings in 2023 amid ‘meme stocks’ rallies, in which retail investors coordinate on social media and focus their bets on struggling companies with high short interest.
Tupperware has $500 million to $1 billion in estimated assets and $1 billion to $10 billion in estimated liabilities, according to bankruptcy filings.
It listed the number of creditors to be between 50,001 and 100,000. The company had in 2023 finalized an agreement with its lenders to restructure its debt obligations and signed investment bank Moelis & Co to help explore strategic options.
