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Food storage brand Tupperware warns of bankruptcy as shares plunge
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By Nithya Bose in US business news, posted April 12, 2023
Tupperware has warned it could go out of business unless it can quickly secure new funding as its shares continue to plummet.
The firm is looking to boost its capital structure to "remediate its doubts regarding its ability to continue as a going concern."
The food storage maker has also engaged advisors to help turn around the business.
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It issued a going-concern notice if its lenders demand payment for continued access to the company's main line of credit.
The document reads: "If such demand for repayment were to occur, the Company does not have the financial resources to repay such obligations.
"The Company is also dependent upon its [line of credit] to fund its operations and satisfy obligations."
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Tupperware, founded in the 1940s by American entrepreneur Earl Tupper, saw a brief upsurge in popularity during the pandemic amid global lockdowns.
But, after the going-concern statement on Monday, April 10, its share price plunged to less than $2.
A decade earlier, its shares were worth almost $100.
While Tupperware still sees over $1 billion in quarterly global sales, it lost $28.4 million in the most recent quarter due to rising expenses, inflationary pressures, and reduced sales.
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Now, the firm is looking at all options to get back on track financially, including new lines of credit, new investors, selling part of its real estate, and further cost-cutting.
CEO Miguel Fernandez said: “Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position.
“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.”
Source: NBC News
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