Shares of Tupperware Brands (TUP), a manufacturer of food storage containers, fell to an all-time low. It happened after the company issued a warning that it might cease operations.
Tupperware stated that various circumstances and occurrences “raise substantial doubt about the Company’s ability to continue as a going concern.” In a regulatory filing on Friday, April 7.
The company cited “challenging internal and external business economics” in addition to increasing borrowing amounts and rates as the cause. It claimed to be in discussions with possible investors or finance partners. It is also working with financial consultants to get further funding.
Tupperware continued, “Management thinks that it will not have sufficient cash to operate its operations and meet its commitments in the absence of receiving enough funding or revisions to its credit agreements. If that occurs, the business said, it “may be forced to discontinue its operations completely.”
Why is Tupperware facing such challenges?
Tupperware reported its 2022 net sales in March at $1.3 billion, an 18% drop from the previous year. The company attributed the dip to decreased sales and operational margins.
According to managing director at GlobalData Retail and retail analyst Neil Saunders, the brand hasn’t been able to completely connect with younger consumers.
Saunders claimed that the company had lost its competitive edge. “The company used to be a hotbed of innovation with problem-solving kitchen gadgets,” he added.
Investors are suing Tupperware for making false representations in its 2020 report and failing to “disclose its serious issues with internal controls.”
Company doing everything it can to save business:
Tupperware’s CEO, Miguel Fernandez, stated that the company is “taking immediate action” to address its financial crisis and is “doing everything in its power to mitigate the impact of recent events.” The corporation stated that one of the possibilities under consideration is to scale back its real estate holdings. On hearing the news, Tupperware Brands’ stock fell by over 49%.
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