The name Tupperware has connected with households both in the US and the rest of the world. Smart containers with resealable lids became a mainstay of American kitchens after they were introduced by Earl Tupper in 1946 and expanded throughout the world.
Sales soared after hiring Brownie Wine, a single mother who pioneered the Tupperware parties that became synonymous with suburban America.
The direct sales model made Tupperware a pillar of the industry, with armies of contractors earning commissions on sales in addition to sign-up bonuses. At Tupperware, most salespeople are women. Although their numbers have dwindled, Tupperware sellers still number more than 465,000 worldwide, the company said in a bankruptcy court filing this week, the Financial Times reported.
Tupperware’s problems
A combination of factors dragged the company down: a broader backlash against plastic, a fragmented global distribution network and the growing anachronism of a focus on home sales in the age of online shopping. Competitors, from Rubbermaid to cheaper knockoffs, also flooded the market.
Tupperware’s business got a boost when people cooked more at home during the pandemic, although parties had to be moved online. The rise did not last long. By 2022, the last full year for which the company reported financial results, revenue had fallen to $1.3 billion. In its bankruptcy filing, Tupperware claimed $680 million in assets and $1.2 billion in debt. Its stock trades at around 50 cents.
The demand for its plastic containers has not disappeared. In the U.S., retail sales of food storage products totaled $1.8 billion last year, according to Circana, a market intelligence firm, about 18 percent higher than before the pandemic.
But consumers now buy about three-quarters of their home goods in stores and 20 percent online, Tupperware’s chief restructuring officer Brian Fox said in a bankruptcy filing, adding that the company is “late to the party when it comes to modern consumers”.
Some Tupperware products are now sold by major retailers, including Target, Macy’s and Amazon, as well as independent stores in markets such as China. The majority of Tupperware’s sales come from countries outside of North America.
Moving beyond direct sales was difficult. Tupperware is a frequently searched term on Amazon, with about 500,000 searches a month, but one of the company’s challenges is that a search for its name brings up results for other brands, Fox said, according to the FT.
The sellers
Recruiting new salespeople remains critical to Tupperware’s market reach. An undated company “career dossier” for new consultants lays out rhetorical tactics to be persuasive. “The more people you hire and the more they sell, the more they make AND the more you make!” he says.
Income figures on Tupperware’s website reveal that profits are meager for the vast majority of sellers. In 2023, more than half of its sellers were considered “inactive”, while the largest group of active sellers earned an average of $525 for the year, the FT notes.
Tupperware vendors contacted by the Financial Times were optimistic that the company would continue to operate after settling its debts in bankruptcy proceedings.
Tupperware has been trying to find a buyer for years and has received formal offers on several occasions. In July, it even prepared documents for another company to take it over through a simplified bankruptcy sale process, but that collapsed when its biggest creditors objected.
Around the same time, a large chunk of the company’s debt changed hands from a group of banks to hedge funds and other investors, including Alden Global Capital. They opposed selling Tupperware through bankruptcy to another business and instead wanted to seize some of the company’s assets out of court — including the Tupperware brand, according to court filings.
However, the board decided that too many suppliers, tax authorities and other parties were involved for such a significant transfer of assets – especially of a public company – to take place behind closed doors.
Creditors have a different idea. They have asked the court to block Tupperware from using $7.4 million in cash in its treasury to cover expenses such as paying workers while it is in bankruptcy. Instead, they want to liquidate or take control of the company.
Source: ot.gr
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