Tupperware, the most loved kitchenware brand, is on the brink of collapse after its shares plunged by almost 50%. It stated in a Securities and Exchange Commission filing that there is substantial doubt about its ability to continue.
As per the SEC filing, Tupperware called the possibility of breaching the credit agreement it has as probable due to forecasted non-compliance with financial covenants. The 77-year-old icon needs more time for its annual report, and cash constraints caused by higher interest costs and timing of re-engineering actions.
The company believes it could become non-compliant with its credit agreement’s financial provisions as soon as the end of the first quarter, a potential event that could enable its lender to demand repayment. Tupperware had $705 million in borrowings, under its credit agreement, at the end of 2022.
Miguel Fernandez, Tupperware CEO, said they are doing everything in its power to mitigate the impacts of recent events. The company is taking immediate action to seek additional financial and address its financial position. Tupperware highlighted that if it is unable to obtain adequate capital resources or amendments to its credit agreement, it’s because of short-term liquidity issues.
Competitive Market
In recent years, Tupperware has struggled to keep up with competitors. It has failed to attract younger customers with newer and trendier products. The New York Stock Exchange warned Tupperware’s stock could be delisted for not filing an annual report. Fernandez said the Tupperware used to be a hotbed of innovation with problem-solving kitchen gadgets, but now it has really lost its edge.
