Tupperware is getting new life after a bankruptcy judge approved a deal to save the beloved food storage company
It will enable the iconic brand, known around the world for its plastic food containers, to exit Chapter 11.
It’s also a boost for the army of 300,000 local agents who sell Tupperware to friends and family. Direct sales are an important source of revenue in addition to sales at stores such as Walmart and Target.
But it’s understood the plan to close Tupperware’s last factory in the Midwest will still close while production moves to Mexico.
The Delaware court ruling on Tuesday means the company will operate under a new name: The New Tupperware Co, which it says will have a “start-up mentality.”
A worker at the Tupperware factory in Hemmingway, South Carolina
Under the deal, Tupperware will sell its brand name and key assets to a group of lenders for $23.5 million in cash and $63 million in debt relief.
Despite recent setbacks, Tupperware remains a nostalgic favorite for many, with its airtight containers revolutionizing food storage after World War II.
Tupperware was founded in 1946 by chemist Earl Tupper, whose airtight plastic containers extended the shelf life of food for families still struggling after the war and the Great Depression.
The brand became popular in the mid-20th century with the famous Tupperware Parties, a direct sales model that gave many women the opportunity to earn extra income by selling to friends and neighbors.
As the brand expanded over the years to include a variety of kitchen products, competition from newer rivals – such as Rubbermaid and OXO – and shifting consumer preferences toward glass containers undermined its dominance.
The 78-year-old company has been fighting for years to revive its fortunes. The pandemic gave Tupperware a temporary sales boost as more people cooked at home, but that wasn’t enough to offset the brand’s struggles.
Amid debts of more than $1.2 billion, it filed for bankruptcy in September.
“This is a situation that was in dire need of a comprehensive global solution,” Spencer Winters, an attorney representing Tupperware, said during Tuesday’s U.S. Bankruptcy Court hearing.
Winters called the sale agreement a “great outcome” that he said will preserve Tupperware’s business, customer relationships and jobs.
The sale agreements call for Tupperware to become a private company under supporting ownership of the purchasing lender group, which includes hedge fund managers Stonehill Capital Management and Alden Global Capital.
Last week, Tupperware said the new company’s “initial focus” would be on the US, Canada, Mexico, Brazil, China, South Korea, India and Malaysia, followed by European and other Asian markets.
Tupperware already warned in March The company may not survive due to declining demand for plastic containers and mounting debt.
Then in June, the company announced it would close its last U.S. factory and lay off 150 employees. It is moving work to Mexico to take advantage of cheaper wages – and that plan remains unchanged under the new management.
The American factory in the small town of Hemingway, South Carolina has produced billions of kitchen cabinets since it opened 48 years ago.
The closure — which will take effect later this year or early next year — is a huge blow to the Williamsburg County plant’s 148 employees.
Production will be moved to Lerma in Mexico, where the company says it already makes items for the US and Canada.
Tupperware opened the South Carolina plant in April 1976 to meet demand in the eastern United States Mississippi River as the company grew rapidly.
In 1993, the 900,000-square-foot food factory produced 173 million tubs and containers made from Tupperware’s signature colorful plastic.
The small town of Hemmingway will be affected by the plant’s closure
Production will be moved to Tupperware’s factory in Mexico
Tupperware has been rescued from bankruptcy after racking up $1.2 billion in debt. Airtight plastic containers helped food last longer for families still struggling after the war and the Great Depression, but sales gradually declined over the decades
A group of unnamed women attend a Tupperware party circa 1955, some wearing hats made from Tupperware products
But when big box retailers offered their own versions, sales dropped and there were layoffs: 300 in 1996 and 250 in 2005.
The Covid-19 pandemic boosted Tupperware sales as families stayed indoors and cooked more meals at home.
Since the brief resurgence in sales during Covid-19, the company has suffered from poor sales and mounting debt, sending its share price to ever lower levels.
By June that had dropped to $1.50, down from a high of almost $100 in 2013. When news of the bankruptcy broke in September, it immediately fell from $1.20 to 50 cents.
The next day it plummeted again and has been below 10 cents ever since. Today the rate was below 2 cents.
Under the deal to declare bankruptcy, the company will be taken private.
Tupperware is the latest household name to consider bankruptcy this year.