Sign up for smart news, insights, and analysis on the biggest financial stories of the day.
It’ll take more than airtight packaging to keep Tupperware from souring.
Following a regulatory filing late Friday admitting “substantial doubt about the company’s ability to continue,” share prices for the plastic container company on Monday morning spoiled faster than non-vacuum-sealed devilled eggs sitting at room temperature.
The Tupperware Party is Over
Long gone are the days of suburban Tupperware parties for salesmen to pitch the plastic container product line. And yet, the Tupperware corporation seemed to resist joining the 21st Century economy. Here’s a prime example: the Kleenex of food-storage containers only started selling their not-as-ubiquitous-as-you’d-think products at Target last year, in what was marked as a major strategy shift to tap major retail revenue streams.
But the pivot to modernity has proven to be perhaps too little, too late. Last week, the company said that a violation of its credit facility covenants is a probable outcome due to cash restraints, and it likely doesn’t have enough liquidity to fund ongoing operations without additional money. Along with the doom-and-gloom, the company announced a series of penny-pinching maneuvers — none of which seemed to convince Monday’s traders that there was anything left to be preserved:
- Tupperware said it would be pursuing right-sizing efforts (read: layoffs), while also reviewing its real estate portfolio and engaging financial advisers to improve its capital structure.
- Its share price plummeted around 50% Monday and is down some 94% over the past 12-month period. It’s now at risk of being delisted from the New York Stock Exchange for failing to file an annual report.
“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,” CEO Miguel Fernandez said in a press release. Sounds like the party really is over for Tupperware.