Tupperware stock plunges after warning it could go out of business
(CNN) — Tupperware shares fell nearly 40% in early trading Monday following a bleak warning that its future is looking murky.
In a regulatory filing late Friday, the container maker said there’s “substantial doubt about the company’s ability to continue as a going concern,” and that it’s working with financial advisers to find financing to stay afloat.
Tupperware said it won’t have enough cash to fund its operations if it doesn’t secure additional money. The company said it is exploring potential layoffs, and it’s reviewing its real estate portfolio for potential money-saving efforts.
The New York Stock Exchange also warned that Tupperware’s stock is in danger of being de-listed for not filing a required annual report.
“Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position,” CEO Miguel Fernandez said in a press release. “The company is doing everything in its power to mitigate the impacts of recent events, and we are taking immediate action to seek additional financing and address our financial position.”
The 77-year-old business has been struggling in recent years to maintain its relevance against rivals. It has been trying to shed its staid image and attract younger customers with newer and trendier products. It also struck a deal with Target last year to sell its products.
Several issues are hurting Tupperware, including a “sharp decline in the number of sellers, a consumer pullback on home products, and a brand that still does not fully connect with younger consumers,” according to Neil Saunders, retail analyst and managing director at GlobalData Retail.
Saunders said Tupperware is in a “precarious position” financially because it’s struggling to grow sales, and because it’s “asset-light it doesn’t have “much capacity to raise money.”
“The company used to be a hotbed of innovation with problem-solving kitchen gadgets, but it has really lost its edge,” he said.
Tupperware said the entry into Target is part of the brand’s reinvention, which includes plans to grow the business through multiple retail channels and get its products in front of younger consumers who’ve never even heard of Tupperware parties.
But that has failed to work so far: Shares are down 90% over the past year. It also issued another “going concern” warning last November.