Following Warnings Of Bankruptcy, Tupperware's Stock Crashes

It is the lowest level in three years that the stock of Tupperware Brands Corp. has fallen, some 45% to the lowest level since 2009

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As a result of Tupperware Brands Corp.'s go-concern warning issued late last Friday, the company's stock price fell 45% to the lowest level in three years, and the company now employs financial advisors to help guide the company through its near-term challenges.

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In addition to the news, the company (TUP) has suffered yet another blow because its products are just a mere fraction of what their products once were during the 1950s when stay-at-home moms with girls ages ten to thirteen would gather at special parties to introduce the new product lines to their friends and family members.

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As a user opens the website, a picture appears from an episode of the Amazon show "The Marvelous Mrs. Maisel," in which the title character hosts a party for friends while showing them a vintage collection made of pastel colors.

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Women in markets like Indonesia, where income possibilities are limited but social gatherings are common, are using direct selling to make money, despite it being less fashionable in the U.S.

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The key challenge Tupperware says it faces is what you won't believe is one of the biggest surprises of the year

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Since the emergence of the gig economy around the world, the company has struggled for years to retain its sales force, which has shrunk in the face of the proliferation of other opportunities within it.

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During a conference call held by the company in March, analysts were told that the company's sales force had declined 18% during the preceding year.

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It was not even the worst news about the call, because Tupperware had warned in its earnings release that it had identified weaknesses in internal controls over financial reporting and that as a result, it assumed that previous financials would need to be restarted.

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Toward the end of the week in a statement to the Securities and Exchange Commission, the company expressed its expectation that the numbers announced in March will substantially differ from the restated numbers once the 10-K is finalized. The company expects to file the 10-K within the next 30 days.

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It is also noteworthy that the company has been having trouble meeting its financial covenants because of its heavy debt load, which has led to repeated efforts to press its bank lenders to make concessions so that it remains in compliance.

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As a result of the company's warning that its debt burden may force it out of business, Tupperware shares have plummeted this week

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Currently, the company forecasts that it may not have adequate liquidity in the near term if it cannot obtain adequate capital resources or amend its credit agreement, due to challenging internal and external economics, and the increased costs and levels of borrowings under its credit facility. The company said on Friday that if it is unable to acquire adequate capital resources or amend its credit agreement, it may not be able to obtain adequate liquidity.

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In his response, Miguel Fernandez, the company's chief executive officer, said that Tupperware had embarked on a journey to turn around its operations and address the company's capital position as well as its liquidity position.

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The company is seeking additional funding and exploring its options with potential investors and financing partners. Additionally, it is considering selling or leasing back its real-estate portfolio.

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A few weeks ago, Fernandez admitted on the company's third-quarter earnings call that some of the company's problems are a result of the company's own efforts. He told analysts on the call that, despite the challenging global macro environment, our company is not performing at the level or with consistency that we believe it should, as evidenced by a FactSet transcript.

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It is crucial to connect with younger consumers who are unlikely to attend Tupperware parties because this is one of the biggest challenges. To reduce the company's dependence on direct selling, the company started selling its goods in 1,900 Target (TGT) stores throughout the country at the beginning of the third quarter.

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As a result, the fourth quarter sales for these products were only 1% of the total sales for the year, indicating the strategy is not gaining traction as expected.

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It is difficult for Tupperware to compete with other retailers that offer far cheaper food storage containers, such as dollar stores and Amazon (AMZN). Additionally, Americans are increasing their reliance on online shopping services.

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During the last year, the stock price of Tupperware has dropped 98% while the market has fallen 9% as a whole.

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