Iconic houseware brand ready to file Chapter 11 bankruptcy

17 Sep 2024, 20:29 by Kirk O’Neil AMG-TheStreet · Las Vegas Review-Journal

Multi-level marketing companies have been controversial over the years, as sales representatives sign up new sales representatives and earn a percentage of sales from both their sales and also their recruits’ sales.

Some of the most well-known multi-level marketing companies include the industry leader Amway, which started in 1959 and sells cleaning products; Herbalife, founded in 1980 and produces and sells nutritional products; and Tupperware, known mostly for its air-tight food storage containers.

One shocking statistic from Good Bad Marketing claims that, when it comes to Tupperware sales reps, only 1 out of 833 earns over $32,000 a year selling its goods.

If that’s not bad enough, now Tupperware sales reps are getting some tough competition as the company in June began a new sales agreement to sell its products in Macy’s stores.

Anything that will help Tupperware’s sales might be a good thing, though, as the iconic houseware retail brand has faced the possibility of filing for Chapter 11 bankruptcy for at least the last two years.

In March 2024, Tupperware Brands filed a Securities and Exchange Commission report declaring that it would not file its 2023 Form 10-K annual report on time since significant additional procedures were warranted due to the ongoing material weaknesses in internal control over financial reporting.

In that SEC filing, it reported that its 2022 SEC Form 10-K indicated that there was substantial doubt about the company’s ability to continue as a going concern. It also said that substantial doubt about remaining a going concern was continuing into its 2023 annual report.

On May 10, 2024, it filed another SEC notice reporting that its Form 10-Q quarterly report for the quarter ended March 30, 2024, would not be filed on time due to additional time needed for the Form 10-K annual report, which it still had not been filed.

Tupperware filed a subsequent notice on Aug. 14 that it would also be unable to file its Form 10-Q quarterly report for the quarter ended June 29 for the same reasons.

In March 2024, Tupperware did report some quarterly results as it disclosed its Q3 2023 performance, with net sales down 16%.

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The company on June 11, 2024, sent a WARN notice to employees of its South Carolina manufacturing plant revealing that it would shut down the plant and terminate 148 employees in a “permanent closure” and move manufacturing to Lerma, Mexico.

With all of these dark clouds hanging over Tupperware, the iconic houseware company is preparing to file for bankruptcy, people with knowledge of the situation told Bloomberg on Sept. 16.

Tupperware’s stock fell by about 58% to 50 cents per share after rumors of a potential bankruptcy were revealed.

A set of Tupperware kitchen items.

Tupperware planning bankruptcy filing

The Orlando, Fla., company began considering its bankruptcy options after it violated terms of its debt agreements, Bloomberg said. The company had been negotiating the terms of more than $700 million in debt with its lenders, and had agreements in place on the violations, but its financial situation did not improve.

Tupperware, which was founded in 1946 by chemist Earl S. Tupper in Massachusetts, introduced a ground-breaking marketing method in the 1940s to sell its air-tight food storage containers at Tupperware home parties through an army of sales representatives.

The marketing plan would lead to the creation of the Tupperware Parties Inc. division, led by the creator of the party, Brownie Wise.

Tupper sold his company to Rexall Drugs Corp. in the 1950s.