Shares of Tupperware Brands experienced a significant surge of nearly 50% on Friday, following a remarkable 90% jump in after-hours trading the previous day. The surge came after the struggling kitchen storage container maker announced a debt restructuring deal. Known for its vibrant plastic airtight containers, Tupperware had expressed concerns in April about its ability to continue operating due to a decline in sales.
On Thursday, Tupperware revealed that it had reached an agreement with its lenders, which would help alleviate or reallocate approximately $150 million of cash interest and fees. This agreement also granted the company immediate access to a revolving borrowing capacity of about $21 million. Bartosz Sawicki, a market analyst at financial services firm Conotoxia, acknowledged that while the agreement provides a lifeline, the market environment may pose extreme challenges for Tupperware.
Since the surge in demand for Tupperware containers during the lockdown, sales volumes have witnessed a decline since 2022. To address these challenges, Tupperware has sought assistance from New York-based turnaround management firm Alvarez & Marsal. By amending certain credit obligations and extending the maturity of specific debt facilities, the company aims to improve its overall financial position.
The announcement of the debt restructuring deal triggered the stock surge, commencing during after-hours trading on Thursday and resulting in share prices soaring as much as 55.96% by Friday morning. Tupperware also announced a reduction in amortization payments by approximately $55 million, spread through fiscal year 2025. Furthermore, its immediate access to revolving borrowing capacity has been reduced to about $21 million.
Mariela Matute, Tupperware’s CFO, expressed confidence in the agreement, stating that it provides the company with the financial flexibility to pursue both short-term turnaround efforts and long-term strategies in establishing a global omnichannel consumer brand. As of now, Tupperware representatives have not responded to inquiries from The Post.
By Friday’s closing, Tupperware shares rose by 36% to $4.77, resulting in a market value of $212.2 million. This increase followed a significant 63% decline in the company’s value over the past year. Tupperware’s revenue for 2022 stood at $1.3 billion, a decrease from the $1.69 billion achieved in 2021 and a significant drop from the $1.74 billion recorded in 2020. The company has experienced negative sales growth in five of the past six years, and this trend seems to be accelerating this year.
Tupperware, launched in 1946 by chemist Earl Tupper, gained popularity for its airtight seal-tight design inspired by paint cans. In the late 1940s, a single mother called Brownie Wise started organizing Tupperware parties in Detroit, which led to the rise of Tupperware Ladies and became an icon of midcentury suburban living. These gatherings also served as an early form of multilevel marketing. Over the years, other brands emerged in the seal-tight container market. While Tupperware maintains a devoted fan base, enthusiasts acknowledge that its best years are in the past.
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