Tupperware’s stock plunged by close to 50 per cent on Monday (April 10), following a grim warning that its future is looking fuzzy.
The container manufacturer said there is “substantial doubt” about the company’s capacity to continue as a going concern in a regulatory filing late Friday and that it is working with financial advisers to find financing to stay afloat.
Tupperware claimed that if it doesn’t obtain extra funding, company won’t have enough cash to support its operations. According to the corporation, it is looking into possible layoffs and assessing its real estate holdings for potential cost-saving measures.
The New York Stock Exchange also issued a warning that Tupperware’s stock may be delisted for failing to submit the necessary annual report, reported CNN.
“Tupperware has embarked on a journey to turn around our operations and today marks a critical step in addressing our capital and liquidity position,” CEO Miguel Fernandez said in a press release. “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.”
The 77-year-old company has had difficulty staying competitive with rivals in recent years. With newer and trendier products, it has been attempting to shed its stuffy reputation and draw in new customers. It also reached a sales agreement with Target last year.
Neil Saunders, retail analyst and managing director at GlobalData Retail who spoke to CNN, claims that Tupperware is suffering from a “sharp decline in the number of sellers, a consumer pullback on home products, and a brand that still does not fully connect with younger consumers.”
“The company used to be a hotbed of innovation with problem-solving kitchen gadgets, but it has really lost its edge,” he said.
The move into Target, according to Tupperware (TUP), is a part of the brand’s reinvention, which also includes efforts to expand through various retail channels and expose its products to younger consumers who have never even heard of Tupperware (TUP) parties.
However, that hasn’t worked out so far because shares have fallen 90 per cent in the last year. In November, it again issued a “going concern” alert.