Tupperware Brands (NYSE: TUP) is reportedly preparing to file for bankruptcy as early as this week, according to Bloomberg News. The 78-year-old company, best known for its innovative food storage containers and direct sales model, has been battling significant financial challenges in recent years.

The equity crashed 57% on Monday, falling as low as $0.48 per share before closing the session at $0.51.

The anticipated bankruptcy filing marks the culmination of a prolonged financial downturn for the iconic brand. In March of this year, Tupperware issued a dire warning, stating that it was uncertain whether its business could continue as a going concern. This phrase, commonly used in financial disclosures, indicates doubt about a company’s ability to meet its obligations and remain operational.

The company has been facing a severe liquidity crisis and has struggled to manage its debts, which total over $700 million. Tupperware has engaged legal and financial advisors to explore its options, including seeking protection from creditors in bankruptcy court.

Tupperware’s recent history is a far cry from its post-pandemic surge. During the COVID-19 lockdowns, families spent more time cooking at home, leading to an increased demand for food storage solutions. The company initially saw a boost in sales, with more people staying in and relying on meal preparation. However, as the world gradually reopened, sales sharply declined, exacerbating the company’s already precarious financial position.

Founded in 1946 by chemist Earl Tupper, Tupperware revolutionized the food storage industry with its airtight, reusable plastic containers. The company’s breakthrough came not just from the product itself, but from the unique way it was marketed.

In the 1950s, the post-World War II era brought with it a booming economy and a desire for domestic convenience. The “Tupperware party,” an in-home sales method, quickly became a cultural phenomenon. These gatherings allowed women to socialize, demonstrate the product, and generate income, all while staying at home—a revolutionary model for its time. For many women, selling Tupperware offered empowerment and financial independence, at a time when women’s workforce participation was still limited by societal norms.

Despite its early success, Tupperware’s business model has faced significant challenges in the modern era. Direct sales, which once drove its meteoric rise, became increasingly outdated with the advent of e-commerce and changing consumer preferences. In recent years, Tupperware attempted to pivot its sales strategy, expanding its online presence and exploring partnerships with major retailers. However, these efforts have been insufficient to turn the company around.

The pandemic’s sales boost proved to be temporary, and Tupperware was unable to maintain momentum in the face of mounting debt. In the company’s most recent financial disclosure, it revealed that revenue had dropped by over 18% compared to the previous year. Compounding this, Tupperware has faced stiff competition from other storage and kitchenware brands, particularly those with stronger digital presences or higher visibility in physical retail spaces.

Tupperware’s potential bankruptcy filing highlights broader shifts in the direct sales industry. Once a dominant model for selling consumer goods, the direct-to-consumer method pioneered by Tupperware has lost ground in an era of digital-first shopping. E-commerce giants like Amazon and specialized kitchenware retailers have made it easier for consumers to purchase products without needing a middleman.

Moreover, the allure of “party plan” sales has waned. What once felt novel and communal has struggled to keep pace with shifting consumer behavior and the convenience of online shopping. Other companies with similar models, like Avon and Mary Kay, have faced their own challenges in adapting to the digital age.

However, while some of these brands have managed to modernize their operations, Tupperware’s efforts to rebrand and capture a younger, tech-savvy audience have fallen short.

Information for this briefing was found via Unusual Whales and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.