New Tupperware executives take measures “to preserve the long-term financial health of the business”

By Deanna Utroske contact

- Last updated on GMT

© Getty Images \ (takasuu)
© Getty Images \ (takasuu)

Related tags: coronavirus, Finance, Tupperware

Miguel Fernandez joined the company as CEO and President just one month ago. And on Monday he announced cost-cutting measures including temporary furloughs, spending freezes, and salary cuts.

Founded in 1948 as a kitchen and home goods company, Tupperware went public 1996 and currently has 5 cosmetics and personal care brands in its portfolio. The company relies on nearly 3 million independent salespeople around the world, brought in $1.8 in sales last year, and does less than 10% of its business in sales in the US market.

Making Tupperware “a more efficient and profitable company” in the midst of a pandemic

Miguel Fernandez (CEO and President) and Rich Goudis (Executive Vice Chairman) joined the company last month, bringing their experiences in beauty and direct sales to Tupperware to “rapidly create a more efficient and profitable company,” ​according to remarks Susan Cameron, Non-Executive Chairman of the Board, made to the press in March.

“Like many companies navigating this unprecedented environment, we must take prudent and disciplined steps to reduce expenses and maintain necessary financial flexibility and liquidity,” ​Fernandez says in this week’s press release about the company’s response to the Coronavirus pandemic.

“Decisions that adversely impact our employees are never easy,” ​he says, “and we are deeply appreciative of all of our employees for their commitment to our purpose and our independent sales force. We are confident that our current actions will better position the Company to advance our turnaround, strengthen our financial position and accelerate our growth strategies once we emerge from this challenging time.”

Tupperware is taking steps to reduce costs during the Coronavirus crisis

This week’s media release outlines 4 cost-cutting measures. All Tupperware associates at the corporate, factory, and market levels will either be furloughed, given leave without pay or see a reduction in wages.

Fernandez and Goudis will take a 20% salary reduction of Q2; and there will also be a “20% reduction in cash retainers for the second quarter and waivers of certain other fees for the board of directors,” ​according to the release.

Corporate and unit merit-based wage / salary increases are being suspended. And the company is also stopping all non-essential operating expenses as well as capital expenditures.

Beyond these steps meant to directly mitigate the financial challenges resulting from the Coronavirus crisis, Tupperware “is advancing its organization realignment and cost reduction programs, including changes to organizational design and supply chain, which the Company estimates will deliver $50 million savings this year,” ​notes this week’s press release.

Staying financially flexible and maintaining liquidity

Tupperware drew down $225m under a recent credit agreement and optimistically expects to pay down the draw before the end of Q2

Rich Goudis, Executive Vice Chairman of Tupperware Brands added, “We are taking these actions to ensure we can deliver value to all stakeholders now and over the long-term. The draw down from our credit agreement was a cautionary step to ensure we have financial flexibility and liquidity during this time, and as we advance efforts to refinance our bonds due in June 2021,” ​explains Goudis. 

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DeannaUtroske-smallphoto

Deanna Utroske is a leading voice in the cosmetics and personal care industry as well as in the indie beauty movement. As Editor of CosmeticsDesign.com, she writes daily news about the business of beauty in the Americas region and regularly produces video interviews with cosmetics, fragrance, personal care, and packaging experts as well as with indie brand founders. Find out how else the Coronavirus crisis has changed the beauty industry in this recent #duviews video.

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