Tupperware Brands is reported to have hired restructuring, investment banking and law firm advisors as the company’s revenue declined.
Household goods manufacturer Tupperware Brands is one step closer to filing for bankruptcy and has hired advisers, according to a published report.
The Orlando, Florida-based company, which sells containers to preserve food and ingredients, engaged several advisers from investment bank Moelis & Co., law firm Kirkland & Ellis and turnaround management firm Alvarez & Marsal, the Wall Street Journal reported.
Shares of the company have fallen by 92% over the past year and by 36% just over the past month.
The company warned earlier this month that filing for bankruptcy was a possibility as its revenue plummeted.
Tupperware said in its April 7 SEC filing that it could violate the promises it made in its credit agreement and that it needed more cash flow.
“The Company has determined that a violation of its Credit Agreement covenants is probable to occur as a result of forecasted non-compliance with financial covenants and the Company’s delay in filing its Form 10-K, as well as cash constraints caused by higher interest costs and timing of re-engineering actions,” the statement said.
Tupperware faced additional challenges from paying interest on its debt and estimates it lacks enough liquidity to continue operating.
“Further, due to the challenging internal and external business economics causing volatility in the Company’s earnings, coupled with the increased levels and cost of borrowings under its Credit Agreement, the Company currently forecasts that it may not have adequate liquidity in the near term,” according to the SEC filing. “The Company has therefore concluded that there is substantial doubt about its ability to continue as a going concern.”
The container company also said it could either raise more capital or sell its real estate assets.
Founded in 1946 by Earl Tupper, a chemist, the company was known for its Tupperware parties during its heyday.
But its popularity has waned in recent years as competitors emerged.
In 2022, sales dropped by 18% to $1.3 billion compared to 2021.
The company sells its products in over 70 countries, but faced additional challenges due to covid-19 related lockdowns.
Tupperware containers are still often marketed and promoted to friends and family members from consumers who are fans of the product.
“Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position,” said CEO Miguel Fernandez in a statement. “The company is doing everything in its power to mitigate the impacts of recent events, and we are taking immediate action to seek additional financing and address our financial position.”
In a candid statement, Fernandez also pointed his finger at the company’s management team for its troubles.
“The global macro environment continues to be challenging, and we are not executing internally at a level or consistency that we believe we should be,” he said on a recent conference call.