Party City, America’s largest party supply store, has filed for bankruptcy. Late on Tuesday, the retailer filed for Chapter 11 bankruptcy protection in an effort to restructure its debt while keeping doors open. The move comes following a series of issues, including supply chain concerns, increasing inflation, and general consumer slowdown all of which have had an impact on sales. According to the company — which is known for its Halloween costumes and party supplies — said in a regulatory filing that has already reached an agreement with debtholders to cut its $1.7 billion debt load as well as has secured $150 million in financing to allow it to keep stores open and running.
According to CNBC, Party City had decided to move forward with bankruptcy back in November. It’s a sharp turn for the retailer who, in 2019, had reached around $2.35 billion in revenue. However, analysts cite competition from big box retailers such as Walmart and Target, the emergence of Spirit Halloween as a seasonal pop-up model, as well as e-commerce brands as well as the company’s lack of growth in the digital business sector compounded with the COVID-19 pandemic as early factors for their woes. Things were later compounded by the aforementioned supply chain issues and a helium shortage that impacted a major aspect of their business — balloons.
Videos by ComicBook.com
“As we take this important step to put our business on 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,” Party City’s CEO, Brad Weston, said in a press release. “We appreciate the commitment of our team members and the continued support of our partners as we further enhance our position as the ‘go to’ one-stop-shop for celebrating life’s special moments.”
Party City presently operates 823 stores, of which it owns 770. Per their bankruptcy filing, they are seeking approval to walk away from 28 store leases and are considering other store closures.
What do you think about Party City filing for Chapter 11 bankruptcy? Let us know your thoughts in the comment section.
