This article was originally published in Reuters.
September 18, 2024 | LINK
Tupperware files for bankruptcy as its colorful containers lose relevance
Sept 18 (Reuters) - Tupperware Brands (TUP.N), opens new tab filed for bankruptcy protection in Delaware late on Tuesday, succumbing to mounting losses due to poor demand for its once popular colorful food storage containers.
Its popularity exploded in the 1950s as women of the post-war generation held "Tupperware parties" at their homes to sell the containers as they sought empowerment and independence.
However, its sales slumped in recent years as the company struggled to place more of its products in retail stores and online sales platforms. Tupperware has historically relied on independent sales representatives to move its products, but that strategy has failed to reach modern consumers, according to the company.
"Even with a recently restructured balance sheet and a temporary financial boost, Tupperware's high leverage, declining sales and shrinking profit margins were too much to overcome," said James Gellert, executive chairman at financial analytics firm RapidRatings.
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RapidRatings Executive Chairman James Gellert spoke with Reuters about Tupperware’s Chapter 11 filing.
Like other retailers that have recently declared bankruptcy, Tupperware was swept away by a confluence of factors: high debt, declining revenue, shifting consumer preferences, and time running out. Our FHR for Tupperware was a mere 19 out of 100, placing it firmly in our Very High-Risk category. Over 90% of companies that fail are in our Very High-Risk or High-Risk zones.
In today's risk landscape, bankruptcies like Tupperware serve as stark reminders: financial health is the ultimate indicator of distress. Companies that embrace sound risk management and use financial health as a key indicator to identify when risk may be lurking will be stronger, better protected, and less likely to be caught off guard.
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