Party City has declared that it plans to liquidate all of its 700 locations nationwide as its financial troubles worsen and has filed for Chapter 11 bankruptcy protection for the second time in two years.
For the second time in two years, Party City Holdco Inc., the largest party supply store, filed for Chapter 11 bankruptcy protection. The firm said that all 700 or so of its locations in the US would be shut down.
The business is about 40 years old in Woodcliff Lake, New Jersey. The business specializes in different kinds of party materials, ranging from party wear to decorated party products. It may have known quite well across the country as a significant retail organization but still has numerous problems on account of the ongoing COVID-19 pandemic, along with resultant lockdowns and some store shutdowns. These issues resulted in supply chain disruptions along with running out of stock sometimes.
Party City filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas. It indicated having assets and liabilities between $1 billion and $10 billion and over 10,000 creditors. It aims to maintain its stores open during the going-out-of-business sales and will continue most of its 12,000 employees through this phase for help with the wind-down process.
This development comes just over a year after Party City exited its previous bankruptcy in September 2023, during which it erased nearly $1 billion in debt and optimized its store portfolio. citeturn0search1 However, it still faced financial distress; it had overdue rent on some locations, which led to this situation.
The senior lenders of Party City have agreed to provide the needed financial support to fund operations during the wind-down process.The company says that all of its stores will be open as the firm embarks on a going-out-of-business sale.
An era in Party City comes to an end: For a store that’s been attached to decades of celebrations and party planning, the news of store closings represents the end of an era. More broadly, it’s another illustration of a downturn that’s affected large swaths of the retail industry due to the pandemic, fierce competition from online merchants, and shifting consumer behavior.
