By SSN Staff
Tupperware Brands Corp., a household name in kitchenware and direct selling, has struck a deal with its secured lenders, including Stonehill Capital Management Partners and Alden Global Capital, to stabilize its finances and pivot to a more digital-focused, asset-light business model. This agreement marks a critical juncture for Tupperware as it aims to recover from financial struggles earlier this year, driven by challenging market conditions and flagging sales.
Financial Lifeline Through Lender Agreement
In August, Tupperware signed a sweeping agreement to restructure its debt, reducing its obligations by $55 million and cutting annual interest payments by $150 million. The company also secured $21 million in new financing, with an extension to repay $348 million in outstanding debt. Chief Financial Officer Mariela Matute stated that this deal provides crucial financial leeway to advance both short-term recovery efforts and a long-term strategy for global expansion.
“This agreement gives us the flexibility to keep moving forward with our turnaround and work toward building a global omni-channel consumer brand,” said Matute, noting Tupperware’s commitment to improving liquidity and strengthening its capital base.
In line with these financial adjustments, Tupperware announced plans to close its Orlando, Florida, headquarters and lay off 145 employees by the end of the year. This decision was disclosed to the Florida Department of Commerce following Tupperware’s Chapter 11 bankruptcy filing in September.
The proposed sale of certain assets to a group of lenders, called the Ad Hoc Group, was approved by Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware on Oct. 29. Some employees may be offered roles with the acquiring group, though specific details have not been released.
Strategic Realignment and Headquarters Closure
The impending asset sale, which includes intellectual property in Europe, involves multiple administrative steps, such as dissolving agreements with affiliates and submitting reorganization documents. A court hearing on Nov. 6 will address the dismissal of Tupperware’s Swiss case, a prerequisite for the sale.
These restructuring efforts are being steered by Tupperware’s President and CEO Laurie Ann Goldman, who took the helm in October 2023. Goldman’s goal is to modernize Tupperware’s approach with digital tools and a streamlined operating model, enabling the company to maintain a global presence with a focus on core markets in the U.S., Canada, Mexico, and select Asian regions.
Streamlined Priorities and Sustainability Goals
The New Tupperware Co., with backing from lenders, is set to operate with an agile, startup mindset, honing in on core markets while gradually expanding to other regions as finances stabilize. The strategy seeks to leverage Tupperware’s brand recognition while downsizing operations in markets with unsustainable infrastructures.
“We’ve implemented a new digital-first, asset-light strategy while retaining our global footprint,” Goldman said. “We’re pleased that forward-thinking investors share our vision to grow the brand.”
A representative of the Lender Group expressed optimism about Tupperware’s path forward, voicing support for the leadership team’s vision for the brand. Meanwhile, the unsecured creditors committee has also backed the sale as a favorable resolution for the company and its stakeholders.
Court-Supervised Restructuring
Tupperware’s restructuring process has been coordinated with the assistance of advisors. Kirkland & Ellis LLP has served as the company’s legal counsel, while Moelis & Co. acted as the investment banker, and Alvarez & Marsal managed financial restructuring. Additionally, Dechert LLP represents the lender group, with Ankura offering restructuring advice. Brian Fox from Alvarez & Marsal was appointed chief restructuring officer earlier in the year to guide Tupperware through the reorganization.
Tupperware attorney Spencer Winters described the asset sale as “a positive outcome” that helps preserve key parts of the business, including jobs and vendor relationships. The restructuring is expected to give Tupperware the financial footing it needs to transition to a more sustainable model.
Outlook and Challenges
Founded in 1946, Tupperware has a rich legacy in household products and direct sales. However, it has struggled in recent years, with revenue falling by 18% in 2022 as competition intensified and pandemic-driven demand for home goods declined. These challenges underscored the need for Tupperware’s three-year turnaround plan, which emphasizes digital expansion and stronger engagement with both consumers and its network of independent consultants.
The new restructuring agreement is intended to support Tupperware’s recovery, but the company remains cautious, acknowledging risks associated with the Chapter 11 process, shifting customer preferences, and expansion efforts. Market volatility and liquidity concerns continue to pose challenges that demand adaptability.
As Tupperware works through this period of transformation, it remains focused on preserving its brand legacy, supporting entrepreneurial efforts, and meeting evolving consumer expectations. As CEO Goldman remarked, “Change and disruption are challenging, but sometimes necessary to move forward.”
