Tupperware shares dive 48% on potential bankruptcy reports
2min read Tupperware Brands (TUP) is reportedly preparing to file for bankruptcy, according to Bloomberg, after years of struggling to revive its business. The Florida-based company has faced declining consumer interest in its products, leading to significant financial troubles. Tupperware violated its debt terms and has been in extended negotiations with lenders over how to manage more than $700 million in debt. While lenders offered temporary relief earlier this year, the company’s situation continued to deteriorate. As of now, the company’s bankruptcy plans are not final but could be executed as soon as this week.
The home-goods company, famous for its plastic food containers and its mid-century "Tupperware parties," has seen its stock plummet by 49% following the news of the potential bankruptcy filing. Shares of TUP have been volatile, with the stock now trading at around $0.43. Notably, Tupperware has a 43 million float and an 18% short interest, making it a potential squeeze candidate if the company manages to secure financing or an alternative restructuring plan to avoid bankruptcy. Despite its precarious situation, any positive news on this front could spark significant stock movement due to the short interest.
Tupperware’s troubles are not new. In April 2023, the company’s stock took a nearly 50% dive after it warned it could be going out of business. The company has also taken steps to downsize, announcing plans to close its last U.S. facility by January 2025 and lay off over 140 employees. Leadership changes have also been made, with former Spanx CEO Laurie Ann Goldman taking over the company last October, replacing Miguel Fernandez in an attempt to steer the brand through its financial struggles.
Tupperware’s challenges are emblematic of broader struggles in the retail sector. Economic pressures, shifting consumer preferences, and intense competition have led several iconic brands, such as Big Lots and Red Lobster, to face similar financial difficulties. Tupperware, despite its storied history and recognizable brand, has struggled to adapt to these market changes. The COVID-19 pandemic gave a temporary boost to the company’s sales as people stayed home and cooked more, but those gains quickly faded as the world reopened.
If the company does follow through with its bankruptcy filing, it will mark the end of an era for a brand that became synonymous with American food storage. Founded in 1946 by Earl Tupper, the brand rose to prominence in the post-war era, driven by direct sales through "Tupperware parties." The company’s direct-sales model, with over 300,000 independent sellers as of 2022, has been another element under strain in the modern retail environment.
Investors are watching closely for any signs that Tupperware may find a way out of bankruptcy. Given its high short interest, any news of financing or a successful restructuring plan could trigger a short squeeze. However, the company’s recent poor execution and declining sales suggest that it has a difficult road ahead. Until Tupperware proves it can secure a sustainable financial path forward, many are steering clear of the stock despite its potential for short-term volatility.