Why Things Went South: Tupperware Share Price Plummets On Bankruptcy Filing

Summary:
• Tupperware share price closed trading nearly 60 percent down on Monday, underlining a sad turn for an iconic brand. But what went wrong?

Tupperware stock shed nearly 60 percent of its value on Monday, as the market reacted to news of a Chapter 11 bankruptcy filing. The household storage container manufacturer has failed to turn around its fortunes, with years of loss-making bringing it to the brink of total collapse. Bloomberg reported on Monday that the company had listed the services of legal and financial advisors, seeking protection after failing to meet its debt obligations.

The company has been around since the 1950s, but found itself in headwinds around 2020. It issued warnings about its ability to get out of a debt hole that kept growing despite replacing its CEO, Miguel Fernandes with Laurie Goldman in 2023. The move to file for Chapter 11 Bankruptcy protection came as the debt pile grew to between $1 billion-$10 billion against assets in the range of $500 million-$1 billion.

Tupperware Brands (NYSE: TUP) built its reputation around high-quality air-tight food storage containers, which it marketed as being able to keep food fresh for longer. It stated that it would seek the court’s permission to continue operating during the bankruptcy proceedings, signaling efforts to stay afloat.

The company announced in June that it will close its last remaining US factory in South Carolina and shift manufacturing to Mexico. The move was designed to reduce labour costs and will see 148 workers in the US lose their jobs by January 14, 2025. However, Tupperware still has factories in Brazil, Belgium, South Africa, Portugal, India, South Korea and China.

How and Why Tupperware Collapsed

Ultimately, Tupperware’s collapse was down to a mix of failure to innovate and poor management decisions. With generational changes, the nostalgic “Tupperware parties” alone couldn’t keep the company afloat in an environment of tightening competition, brought by the likes of Rubbermaid, OXO and Pyrex.

Red flags have been coming fast in the last year, with delayed earnings filings, closure of factories and a warning in April this year that it would struggle to stay in business for another year. All these were underpinned by declining sales and mounting debt that created a quicksand that ultimately led to bankruptcy. At close of business on Monday, Tupperware share price was down by 74.5% year-to-date and 96.7% below its position 5 years ago.