💥Can't Contain the Drama💥
💥Can't Contain the Drama💥
Tupperware Brands Corp., Blink Holdings Inc., Takeoff Technologies Inc., Mobileum Inc., Presperse Corp.
On September 17, 2024, Florida-based Tupperware Brands Corp ($TUP) and 8 affiliates (collectively, the “debtors”) filed chapter 11 cases in the District of Delaware (Judge Shannon).
As a preview of things to come, here’s Kirkland & Ellis LLP’s Spencer Winters on behalf of the debtors during the first day hearing:
“I think it was about three weeks ago that I was last here and I promised one of these days I’ll bring Your Honor a prepack. It’s not today.”
As you’ll soon come to find out, these cases are about as far as you can get from a prepack.
The debtors are a “leading brand for food storage and other kitchen and beverage solutions” that “partners with a world-wide sale force of over 465,000 independent sales consultants.” Say it with us … multi level marketing!
We’ve previously discussed the company’s history:*
But, in short, it all started in the 40s when saleswoman, Brownie Wise, invented the “Tupperware party.” She would gather her friends at a “fun and interactive” event and show off the wonders of the Tupper seal. From the first day declaration of CRO, Brian Fox of Alvarez & Marsal LLC:
“Famously, Wise would fill a Wonder Bowl with water (or even grape juice), show the group how to ‘burp’ the lid, and then toss the bowl to an attendee. The women, who were used to containers that would shatter and spill, marveled that not a single drop escaped through the Tupper seal.”
Ah, simpler times.
TUP, seeing the success of the Tupperware parties, decided to pull its products from stores and went all in on multi level marketing.
Fast forward to the 2000s and consumer behavior started to shift towards a preference for in-store purchases and online shopping. Tupperware was woefully unprepared. It took until ‘22 for Tupperware to open a digital storefront on Amazon:
“In June of 2022, Tupperware opened a digital storefront on Amazon.com, which offered thirty different Tupperware products. “Tupperware” is a frequently searched term on Amazon (with approximately 500,000 searches a month), but one of the company’s current challenges is that the search results for “Tupperware” presently return results for other brands, undercutting the Company’s strategic purpose for selling on Amazon. A key pillar of the turnaround plan is to increase the Company’s focus on marketing and advertising to capture this existing demand and to generate further sales.”
These “other brands” sell food storage containers at a fraction of the cost of Tupperware.
After a creative tender offer in ‘20 designed to provide some breathing room failed to set the company up for success, the debtors (again) engaged Moelis & Company LLC** and attempted to close on multiple sale transactions in ‘23 and ‘24. The bank lenders thought some of these bids were too low while other potential purchasers backed out at the last minute. By February ‘24, the debtors missed an interest payment requiring a forbearance agreement from the lenders. Further attempts at a transaction failed and the now-debtors needed another extension of the forbearance agreement by August ‘24. That extension was, notably, predicated on the lifting of restrictions on the trading of the term loans.
And this is where sh*t goes sideways.