North American party supplies retailer Party City has filed for Chapter 11 bankruptcy protection and is set to initiate the wind-down of both its retail and wholesale ventures.
The company and some of its subsidiaries filed in the US Bankruptcy Court for the Southern District of Texas on 21 December 2024.
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The filing is the second such move for Party City in two years.
It operates a network of 700 owned and franchised outlets throughout North America, in addition to its e-commerce platform. All outlets are expected to remain open as the company begins a going-out-of-business sale.
The decision to cease operations follows numerous attempts by Party City to navigate a challenging economic landscape, characterised by rising inflation, increased costs, and changing consumer spending patterns.
Party City has declared assets and liabilities each ranging from $1bn to $10bn and has identified over 10,000 creditors, according to Reuters, citing the retailer’s filing to the court.
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By GlobalDataThese legal actions follow the company’s 2023 restructuring, which successfully cut its debt by almost $1bn. Despite this, recent economic challenges have become too severe for the retailer to overcome.
Party City plans to retain upwards of 95% of its 12,000-strong employee base temporarily to facilitate the orderly cessation of operations.
The retailer on its website said: “Our stores are currently open, and we are offering incredible deals and deep discounts on merchandise at our locations nationwide. We invite you to hurry in right away to stock up on everything – from holiday and New Year’s Eve decorations to birthday party supplies and beyond – while the selection is best!
“It has been a true pleasure to be a part of your most special moments over the years. And, in the coming weeks, we hope you stop by to say goodbye and pick up your favourite items, whether you’re organising a big celebration now or planning ahead for milestone moments to come.”
Legal guidance for Part City is provided by Paul, Weiss, Rifkind, Wharton & Garrison alongside Porter Hedges, with AlixPartners serving as financial advisers. Gordon Brothers has been appointed to oversee liquidation sales under company management.
Additionally, Party City subsidiary Amscan, known for designing and distributing celebratory goods, has also filed for bankruptcy.
