It is no secret that Tupperware has been a staple of Singaporean households for a long time.
Most of us own at least one item from Tupperware, from water bottles to containers. Thus, the idea of it potentially shutting down gives us a reason to mourn.
Though it may not seem like it, Tupperware could be going out of business as its shares dropped almost 50 per cent on Monday (10 April).
In a Precarious Situation
On Friday (7 April), Tupperware Brands Corporation announced that it had hired financial advisers to assist in honing its capital structure and ease the company’s uncertainty about moving forward.
Its chief executive officer, Miguel Fernandez, said that the company would not have sufficient cash to support operations if it failed to look for prospective investors or financing partners to stay in business.
The company also thought of launching cost-cutting strategies such as lowering the number of jobs and reviewing its real estate portfolio.
While Tupperware was doing relatively well during the first two years of the COVID-19 pandemic, it has declined.
During the lockdown in the US, kitchenware sales increased, causing Tupperware’s share price to rise to US$37 (SG$ 49.30).
The decline of Tupperware is allegedly caused by cash constraints resulting from higher interest rates.
After the stock dropped 49.6 per cent on Monday, it closed at US$1.22 (SG$1.63).
Losses Sustained by Tupperware
Tupperware reported a loss of US$28.4 million (~ SG$ 37.8 million) for 2022 in March. This was down from US$152.2 million (~SG$ 203 million) in 2021.
Last year, its net sales fell by 18 per cent to US$1.31 billion (~SG$1.75 billion).
Tupperware is working with Moelis and Company and Kirkland & Ellis to ease its large long-term debt of US$700 million (~SG$ 933 million).
Its shares have dropped a whopping 84 per cent since it announced its concerns about continuing the business in November last year.
History of Tupperware
Tupperware has had a long history, being founded in 1946 by Earl Tupper.
Tupper originally owned his own company, which developed industrial uses for plastic and supplied the US government with equipment for the Navy.
The company started producing consumer products only after World War II as raw materials were scarce then, so they focused on their partnership with the government.
The plastic tumbler was the company’s first consumer product, but its products were not sold in retail stores and sold to corporations instead.
Tupper invented an enhanced form of plastic polyethylene named Poly-T and made containers from it secured with airtight lids.
In 1948, Tupper hired Brownie Wise of Stanley Home Products, which distributed Tupperware. Wise sold Tupperware products to women at home parties.
After hiring Wise, the company’s sales soared from $5 million to $25 million over three years.
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