US-based Tupperware, which makes reusable plastic containers, has said that there's "substantial doubt about the company's ability to continue as a going concern".
Tupperware said it is engaging with financial advisors to secure additional financing as it faces cash constraints.
The company was founded in 1946 by chemist Earl Tupper.
The revelation from the company sent its share plummeting today.
As with other direct selling companies, it casts doubt over its business model, as well as how speedily it can remake itself as consumer habits shift.
Pandemic boost
Covid-19 was a boom to the business with earnings in the third quarter of 2020 more than quadrupling as locked-down home cooks whipped up recipes.
But the resurgence in dining out means less room for leftovers.
Boss Miguel Fernandez now believes the company is entering an encouraging "new post-pandemic phase", but the company faces cash constraints.
An earnings misstatement, which has left it late in filing its annual report, could cause creditors to declare Tupperware has violated its debt covenants.
Even if Tupperware can appease its creditors or find new investors, the rise of e-commerce has dented the fortunes of companies that lean on direct selling.
Cosmetics firm Avon agreed to sell itself to Brazilian giant Natura in 2019 for instance.
Tupperware relies on some 3 million independent sales members to distribute its products into nearly 70 countries.
Compared with the company's heyday, customers have more options for food storage, more places to buy from, and less time for Tupperware parties.
