Iconic Tupperware flags doubts about ability to continue

-Tupperware Brands on Friday warned it was not certain its business could continue as a going concern and faced a liquidity crunch due to slumping demand for its iconic food storage containers.

Founded in 1946 by chemist Earl Tupper, the company’s popularity exploded in the 1950s as women of the post-war generation held “Tupperware parties” at their homes to sell food storage containers as they sought empowerment and independence.

The COVID-19 pandemic provided a boost in sales from families who sheltered at home, cooked more and produced lots of leftovers. Sales have declined in recent quarters as the world re-opened.

In a U.S. Securities and Exchange Commission filing on Friday, the company flagged doubts about its ability to continue as a going concern for at least a year and forecast inadequate liquidity to fund operations.

The company has reported ballooning losses and also has been facing higher costs of resins for its products, labor and logistics.

Tupperware first raised substantial doubt about its ability to continue as a going concern nearly a year ago.

Since then, it appointed consumer goods industry veteran Laurie Ann Goldman as its CEO, hired investment bank Moelis & Co to explore strategic alternatives following the discovery of prior period misstatements in financial reporting, and struck an agreement to restructure its debt.

The company, which had earlier delayed its 10K filing for 2022, also filed a NT10-K on Friday to notify that it will delay the 10-K filing for 2023.

It plans to complete its due processes and file its 10K for 2023 “as promptly as possible,” the company said, but added that “there can be no assurance with respect to the timing of completion of the filing.”

Tupperware blamed ongoing material weaknesses in internal control over financial reporting, its challenging financial condition, and significant attrition resulting in resource and skill set gaps for multiple delays in its annual report filings.

Earlier this year, Tupperware was required to retain KPMG as its new independent auditor after the former auditor declined re-appointment. It also entered into a forbearance agreement with its lenders that reduces its weekly minimum U.S. liquidity requirement under credit agreement to $10 million.

(Reporting by Granth Vanaik and Mehnaz Yasmin in Bengaluru; Editing by Marguerita Choy and Bill Berkrot)