Tupperware stock closed down nearly 50 per cent after the company warned that it may go out of business. Photo / Getty Images
Tupperware stock closed down nearly 50 per cent after the company warned that it may go out of business. Photo / Getty Images
Tupperware, which has been operating for 77 years, may be on the brink of collapse.
Tupperware’s shares plunged 50 per cent when it issued a bleak warning that its future is in jeopardy.
The company, which sells storage and food preparation products, gained a cult following in the1950s when women hosted parties to sell items.
But the company dropped a bombshell announcement in a US regulatory filing revealing there was “substantial doubt” about the company’s ability to continue and it had called in financial advisers to try to save the troubled brand.
Tupperware’s chief executive officer Miguel Fernandez said the company was seeking potential investors or financing partners and that without extra money it would not be able to run the business.
The company was considering cost-cutting measures, including slashing jobs and reviewing its real estate portfolio.
“Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position,” Fernandez said.
A graphic from an early Tupperware advertisement but younger consumers are unaware of the brand.
“The company is doing everything in its power to mitigate the impacts of recent events, and we are taking immediate action to seek additional financing and address our financial position.”
Meanwhile, the New York Stock Exchange warned that Tupperware stock is in danger of being delisted for not filing a required annual report.
Tupperware shares have plunged 90 per cent since last year after it also raised concerns in November about its ability to continue to operate.
While it scored a deal with Target last year to stock its products in the US, the brand has been struggling to compete against rivals as well as gain a following with younger generations who have never heard of Tupperware parties.
GlobalData retail analyst and managing director Neil Saunders said Tupperware was in “precarious position” financially and blamed its woes on a “sharp decline in the number of sellers, a consumer pullback on home products” and its failure to connect with younger consumers.
“The company used to be a hotbed of innovation with problem-solving kitchen gadgets, but it has really lost its edge,” he told CNN.
Overall, the retail sector has been hard hit by the economic downturn in recent times with a number of outfits collapsing.
