The end of Tupperware‘s famous plastic jars seems imminent: the company’s continuity is at risk if an agreement with creditors is not reached soon.
Too late for help?
Tupperware is in deep financial trouble: in the last quarter, sales fell by a fifth and net profit plummeted from a positive 60.4 million dollars last year to a loss of 3.8 million now. Although CEO Miguel Fernandeze is restructuring the company, aiming to sell some parts and focus more on regular sales channels, a positive end result is nowhere near guaranteed. The American brand is trying to turn the tide by making the move to online sales and aims to get its products on shelves at major retailers as well.
But it may already be too late for that: in the report accompanying the financial results, Tupperware admitted that there are considerable doubts whether the company can continue to operate and that continuity is at risk if an agreement with creditors is not reached soon. The company, known for its home parties as a sales channel, is in talks with the banks but fears there will be no timely solution. Its debts have climbed to more than 700 million dollars, while cash reserves are down to only 103 million.
The news sent the share price down by more than 40 %, while strikes broke out in plants like the one in Aalst, Belgium. The workers have since returned to work, however, after the ‘plant manager’ was able to reassure the 260 staff that the future for the local factory could look less gloomy. The company’s plastic kitchen products are increasingly facing competition from cheaper retailers such as Action or Ikea.