Once the favorite of every Indian mother and an integral part of the kitchen, the iconic Tupperware might soon go out of business after the company got a non-compliance notice from the New York Stock Exchange last week for failing to file annual results with the Securities and Exchange Commission.
In a statement, Tupperware warned that “there is substantial doubts about our ability to continue as a going concern”, leading to a sharp fall in the NYSE-listed company’s stocks by nearly 50%.
The brand, with presence in more than 70 countries, faces being delisted by the NYSE.
“It was no secret that Indian mothers could not deal with children or spouses losing Tupperware leakproof containers,” said Tupperware reseller Avni Desai, who is now worried about the future of her successful Tupperware network of 15 years.
Tupperware entered India in 1996. Its direct selling model led to the rise of ‘mompreneurs’: housewives and mothers who would sell Tupperware products from home.
“Tupperware supports women empowerment. “All our partners are women and 90% of our products are made in India and exported to 13 countries,” Tupperware India Managing Director Deepak Chhabra said in August 2021.
In 2021 Tupperware announced an aggressive expansion plan to set up 1,000 retail stores in five years and inviting franchisees.
Tupperware sales and profits have steadily fallen in the past few years
According to market analysts, Tupperware sales and profits have steadily fallen in the past few years, despite the pandemic breathing new life into the maker of food storage containers.
“Sales climbed steadily during the pandemic as people stayed home and cooked for themselves, but now they have tumbled from nearly $500 million in the fourth quarter of 2020 to just $313 million in the recent fourth quarter,” market analyst Kiran Shah said.
Financial data in the preliminary results released by Tupperware paint a grim picture, with $705.4 million in total debts and net sales in 2022 of $1,305.6 million, a decrease of 18%. Loss from continuing operations was reported at $35.2 million.
“Substantial doubt” to continue as a going concern
In a regulatory filing, the company said there is “substantial doubt” about its capacity to continue as a going concern, adding that it is working with financial advisers to find financing to stay afloat.
Tupperware has claimed that if it doesn't obtain extra funding, it will not have enough cash to support its operations. It is looking at possible layoffs and assessing its real estate holdings for potential cost-saving measures.
CEO Miguel Fernandez in a statement said the company has embarked on a journey to turn around operations and taking critical steps in addressing 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.”
