(New York) No more mythical Tupperware meetings? The fate of the American company that makes plastic containers and other kitchen gadgets and sells them directly to consumers is uncertain.
The company admitted on April 7 that it had “significant doubts about its ability to continue its activity” and its action on Wall Street has been on a roller coaster ever since.
It collapsed 50% on Monday after the company’s warning, before recovering a bit and showing up more than 25% on Thursday.
The company was started in 1946 by Earl Tupper to market his invention: unbreakable, lightweight, sealable plastic containers.
The products were so innovative “that customers needed demonstrations to understand how they worked,” the company explains on its site.
The idea of the famous Tupperware meetings, often at the home of a host receiving knowledge in their living room in exchange for a discount on a product, was launched.
But the brand has lost its luster and its sales have halved in ten years, dropping to $1.3 billion in 2022. And the company lost $14 million last year.
On the one hand, it is facing a drop in the number of its sellers, notes Neil Saunders, specialist in the distribution sector for the firm GlobalData. The majority of its sales are indeed through animators who earn a percentage of the amount of sales made, but the number of those regularly placing orders has fallen from around 800,000 at the end of 2012 to 284,000 at the end of 2022.
Tupperware is also not as popular anymore, especially with younger people, he says. The company no longer offers very innovative products and above all “has lost a lot of market share to cheaper brands that are accessible directly in stores”, underlines Neil Saunders in a note.
To preserve their food, some consumers are also increasingly using containers recovered during take-out or delivered meals.
The company has tried new strategies, including partnering with chain stores and expanding its online sales.
But in early March its managing director Miguel Fernandez acknowledged that “2022 has turned out to be much more complicated than we expected”, between high inflation, the maintenance of health restrictions in China, the war in Ukraine which has affected sentiment consumers, the strengthening of the dollar and the rise in interest rates.
The company said last Friday that it had hired financial advisers to help it “improve its capital structure and its level of short-term liquidity”. It is considering new investors or financial partnerships as well as the sale of certain real estate.
