The food storage container specialist Tupperware has filed for bankruptcy in the USA. After years of problems, the immediate trigger was a dispute between the US company and major creditors. They point to missed debt payments and are claiming large parts of Tupperware. The management is seeking protection from this in proceedings under Chapter Eleven of the US bankruptcy law. It is still unclear whether the plan will work out.
Business should continue
Tupperware wants to continue the business during the insolvency proceedings and is also continuing the search for a buyer. According to US court documents, only the Swiss Tupperware Products AG has filed for insolvency of the international subsidiaries. One of the ten creditors is from Switzerland. The rest are from the USA. It is unclear to what extent the insolvency will also be felt by German consumers. An inquiry to the German Tupperware subsidiary initially remained unanswered.
Tupperware, a pioneer in plastic food containers, has been struggling financially for some time. In recent months, negotiations have been underway with creditors to whom Tupperware owes several hundred million dollars.
Fight with creditors
According to management, the creditor group acquired the loan securities at a good price. They paid three to six cents per dollar of debt. The drastic discount is a result of the doubts about the future that have surrounded Tupperware in recent years. For 15 to 30 million dollars, the creditors have already secured a large part of the debt totaling almost 812 million dollars, Tupperware calculated.
The company believes that creditors will fight the bankruptcy filing in order to gain control of Tupperware instead. Management will attempt to sell the company in 30 days and has $7.4 million in cash to do so.
Tupperware parties: First a success story, then a brake
The name Tupperware is also often used in Germany as a synonym for food storage containers. The company, founded in 1946, grew up with direct sales: Tupperware parties at which sales consultants sell the containers and other kitchen items to the public. The hosts get discounts, the consultants get a commission.
Tupperware emphasized that around 90 percent of its revenues come from such direct marketing. However, the stubborn focus on the long-standing recipe for success also meant that it had missed out on opportunities in online retail, among other areas, as restructuring chief Brian J. Fox admitted in the bankruptcy documents.
It was not until 2022 that Tupperware began selling products online, including on Amazon, and also sought to find its way onto the shelves of brick-and-mortar retailers such as Target in the USA. Unlike in the early years, many consumers knew what Tupperware’s products were – but not where to buy them, management complained.
“The party is over”
Tupperware has 5,450 employees in 41 countries. In addition, there are around 465,000 independent sales consultants. This number has already shrunk following a warning of economic problems, Tupperware stressed. Headlines such as “the party is over” have caused unrest among the consultants.
Tupperware started out with plastic. Inventor Earl Tupper started a plastic company in 1938. During World War II, it produced gas masks, among other things. After the war ended, plastic producers suddenly had significant overcapacity. Tupper experimented until he invented a durable and good-looking plastic that was suitable for food storage containers. The second innovation was the freshness valve on the lid, which allows excess air to be pushed out of the box.
Tupper initially focused on traditional retail – and even had a store on New York’s Fifth Avenue. But then Brownie Wise, a divorced single mother from Detroit, came across the company’s products. She had the idea of selling Tupperware containers at events with demonstrations. This worked so well that in 1951 Tupper turned its back on traditional retail and made Wise head of marketing.
Recently, according to the company, Tupperware has also been affected by “anti-plastic sentiment” – the concern that chemical compounds from plastic will get into food.
© dpa-infocom, dpa:240918-930-235882/1
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