A major party and craft retailer with 850 stores nationwide is considering filing for bankruptcy.
Party City faced the possibility of mass closures just over a year after the company emerged from Chapter 11 bankruptcy.
The party store, known for selling balloons and party essentials, is currently behind on rent at some locations, people close to the business said. Bloomberg.
The store’s latest struggles have been caused by its ongoing financial problems and lagging sales, blamed on the fallout from the pandemic and helium shortages, which ultimately led to the company filing for bankruptcy in January 2023 with a debt load of about $ 1.8 million.
Party City – based in Woodcliff Lake, New Jersey – underwent a restructuring when lenders including Monarch Alternative Capital and Silver Point Capital took over and managed to pay off about $1 billion of its debt, allowing about 850 stores to open to stay.
Although some stores were saved, more than 60 were forced to close, including five in Topeka, Kansas, Salina, New York, Joplin, Missouri, and Owensboro, Kentucky, and most recently in Staten Island.
In September, Party City started liquidation sales at closing locations, offering customers up to 25 percent off.
Party City Holdco Inc. is considering bankruptcy just over a year after the party store filed for Chapter 11
The store in Owensboro, about 100 miles from Louisville, closed its doors for the last time in mid-November, the newspaper said. Owensboro Times.
The Salina location, which has been in business for 20 years, is also advertising a 25 percent discount on its liquidation sale, but plans to stay open until Jan. 16, local news reported.
Another party city in Albany, Georgia, recently closed with a 90 percent discount to final prices, according to WALB.
The Topeka Party City store will close on Jan. 18, 2025, and the Staten Island location at Forest Avenue Shoppers Town will close in mid-January, according to silive.com.
According to Forbes, Party City was successfully expanding before the pandemic, reaching $2.35 billion in revenue in 2019.
Overnight, key customers – those hosting or attending parties – had no reason to shop in store as social distancing was introduced.
Despite being saved from bankruptcy in 2023, the retailer closed more than 60 locations
As the country emerged from lockdowns, it was plagued by supply chain problems, rampant inflation and increased competition.
At the time, the popular retailer was trading at just 40 cents, having once reached nearly $23.
Former CEO Brad Weston previously said of the 2023 bankruptcy: “Today’s action to strengthen PCHI’s balance sheet will strengthen our ability to further advance our strategic priorities and continue to innovate and improve the customer experience.
“As we take this important step to put our company on a stronger financial footing for the future, we are as committed as ever to inspiring joy by making it easy for our customers to create unforgettable memories.”
Weston has since stepped down as CEO of Party City and Barry Litwin will succeed him in August.
In September, Party City started liquidation sales at closing locations, offering customers up to 25 percent off
Party City has not only fallen behind since the pandemic, but has also had to compete with other big-name retailers like Walmart and Target, and the occasional pop-up store Spirit Halloween.
That pressure has increased in an era of rising prices, including for helium used in party balloons, and declining consumer demand.
“Party City used to be one of the best games in town, but it’s now a runaway operation,” Neil Saunder, managing director of Global Data Retail, said last year.
“There’s probably still a role for Party City,” he continued, adding that the company should consider beefing up its online website.