Over the past 2 days, the global business news has been overwhelmed by the announcement that Tupperware files for bankruptcy. This is shocking news to many people while they have no clues how and why this ever happens. Let’s discover more details with us via this article. Additional explanation for such business failure is listed as well.
1. Tupperware Files for Bankruptcy
Tupperware files for bankruptcy after years of declining sales. According to the brand’ press release on September 17, 2024, the company and some of the subsidiaries have voluntarily initiated Chapter 11 proceedings in the United States Bankruptcy Court for the District of Delaware.
FYI: Tupperware Brands Corporation was established in 1946. The brand soon became an iconic kitchenware supplier with superior colorful food containers. In the 1950s, with the popularity of “Tupperware parties” among the post-war women generation, the selling of food containers bloomed. Tupperware was said to bring about such a solution to food waste with innovative products in terms of designs and uses.
Be that as it may, the business doesn’t go well as alway. According to the report filed to Bankruptcy Court, Tupperware has assets of around 500 million to 1 billion USD while being 1-10 billions USD in debt. The number of creditors is up to 100,000.
What happens to Tupperware now? The operation will not stop immediately though. The brand is seeking court approval to continue operation during the bankruptcy proceedings. The brand will also ask for approval of facilitating a sale process for the business. Tupperware hopes to maintain the iconic brand and apply advanced transformation into a technology-led company. Currently, no changes are applied to Tupperware’s independent sales consultant agreements.
2. What Led Tupperware to Bankruptcy
That Tupperware goes bankrupt is such a shock to many people. Despite the decreasing sales, Tupperware products, especially the food containers, still play an essential part in many households. The official details that led to the brand’s bankruptcy are not released yet, but economists and market specialists did point out some sensible reasons why Tupperware files for bankruptcy:
- Struggles in finance management: Over the past few years, the company financial statement was seriously affected by the challenging macroeconomic environment. The constant loss has prevented the brand from standing.
- Outdated business model: Tupperware sales model is following an old fashioned form of direct retail sales via independent sales representatives. The development of e-commerce has been posing a threat to this model. The brand failed to create such a connection to reach modern customers. Along with that, the number of sales representatives has been decreasing enormously.
- Emerging of competitors with better prices and designs: Tupperware is a high-end brand of kitchenware with smart designs and extremely high prices. In the past, this may have worked. However, it’s not anymore with the growth of substitute brands like Lock and Lock or Inochi Global. They supply products with equivalent quality at much better prices. Smart consumers tend to choose them instead of Tupperware.
In conclusion, that Tupperware files for bankruptcy may be a shock to many customers, but it’s forecasted among economists and market specialists. This will be a significant case study for old-fashioned businesses that are not making enough adaptations to the shifting economy.
