Tupperware is getting a new lease of life after a bankruptcy judge approved a deal to save the beloved food storage company.
It will allow the iconic brand known around the world for its plastic food packaging to emerge from Chapter 11.
It’s also a boost for the military: 300,000 local agents selling Tupperware to friends and family. Direct sales are a key source of sales in addition to sales at stores like Walmart and Target.
But it is understood that the plan to close the last Tupperware factory in the Midwest will remain closed and production will move to Mexico.
Tuesday’s Delaware court decision means the company will operate under a new name: The New Tupperware Co, which it said will have a “startup mentality.”
An employee at the Tupperware factory in Hemmingway, South Carolina.
Under the deal, Tupperware will sell its brand 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, and its airtight containers revolutionized food storage after World War II.
Tupperware was founded in 1946 by chemist Earl Tupper, whose airtight plastic containers helped food last longer for families still struggling after the war and the Great Depression.
The brand gained popularity in the mid-20th century with its famous Tupperware parties, a direct sales model that gave many women the opportunity to earn additional income by selling to friends and neighbors.
While the brand expanded to include a variety of kitchen products over the years, competition from new rivals, such as Rubbermaid and OXO, and the shift in consumer preferences toward glass packaging eroded its dominance.
The company, founded 78 years ago, has been struggling for years to revive its fortunes. The pandemic gave Tupperware a temporary boost in sales 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 urgently needed a comprehensive global resolution,” Spencer Winters, an attorney representing Tupperware, said during Tuesday’s hearing in U.S. Bankruptcy Court.
Winters called the sale agreement a “great outcome” that he said preserves Tupperware’s business, customer relationships and jobs.
The sales agreements call for Tupperware to become a private company under the ownership of the buying 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 additional European and Asian markets.
Tupperware had warned in March Your business may not survive due to declining demand for your plastic packaging and mounting debt.
Then, in June, it announced it would close its last factory in the United States and lay off 150 workers. It’s moving work to Mexico to take advantage of cheaper wages there, and that plan hasn’t changed under new management.
The American factory in the small South Carolina town of Hemingway has produced billions of kitchen cabinet staples since it opened 48 years ago.
The closure, which will take effect late this year or early next year, is a blow to the 148 workers at the Williamsburg County plant.
Production will move to Lerma in Mexico, where the company says it already makes items for the United States and Canada.
Tupperware opened the South Carolina factory in April 1976 to meet demand east of the Mississippi River as the company grew rapidly.
In 1993, the 1000,000-square-foot food plant produced 173 million tubs and containers made of Tupperware’s signature colorful plastic.
The small town of Hemmingway will be affected by the closure of the factory
Production will move to the Tupperware factory in Mexico
Tupperware was saved from bankruptcy after racking up debts worth $1.2 billion. Its airtight plastic containers helped food last longer for families still struggling after the war and the Great Depression, but sales gradually fell in recent decades.
A group of unspecified women attend a Tupperware party, some wearing hats made from Tupperware products, circa 1955.
But as big retailers offered their own versions, sales fell and there were layoffs: 300 in 1996 and 250 in 2005.
The Covid-19 pandemic boosted Tupperware sales as families stayed home and cooked more meals at home.
Since the brief resurgence in sales during Covid, the company has suffered poor sales and increased debt, causing its share price to fall to increasingly lower levels.
In June it had fallen to $1.50, down from a high of nearly $100 in 2013. When news of the bankruptcy emerged in September, it immediately fell from $1.20 to 50 cents.
The next day it fell again and has been below 10 cents ever since. Today it was below 2 cents.
Under the deal to bring it out of bankruptcy, the company will go private and be delisted from the stock market.
Tupperware is the latest well-known name to consider bankruptcy this year.