The Party’s Over: Party City Files for Second Bankruptcy in Two Years
Financial Woes Catch Up with Party Supply Retailer
Party City, the beloved party supply retailer, has reached the end of the road. After emerging from bankruptcy just last year, the company has filed for Chapter 11 bankruptcy once again. This time, however, the outcome looks grim. In a filing with the U.S. Bankruptcy Court for the Southern District of Texas, Party City Holdings Inc. announced plans to “implement an orderly wind down of its business and liquidation of its assets.”
A Brief Respite from Financial Troubles
The New Jersey-based company had previously filed for bankruptcy in January 2023, but managed to emerge from the process in October 2023 with $1 billion less in debt. The company also appointed a new CEO, Barry Litwin, who joined the company in August 2024. However, it seems that the retailer’s financial troubles were far from over.
Assets Up for Grabs
According to the filing, Party City will put its assets up for bidding, or initiate store closing sales to liquidate its retail and wholesale inventory and locations if no sale is made. The company reported assets of between $1 billion to $10 billion, along with liabilities of $1 billion to $10 billion, and has between 10,000 and 25,000 creditors.
Employees Get the Bad News
In a videoconference call with corporate employees, Litwin delivered the devastating news that Party City is “winding down” operations immediately, and that their last day of employment would be Friday. “That is without question the most difficult message that I’ve ever had to deliver,” Litwin said.
A Struggle to Stay Afloat
Like many other retailers, Party City had attempted to stay competitive by marking down prices in September. However, the company’s efforts were not enough to overcome its financial challenges. Several stores had already reported closures in recent months, and the company had confirmed 18 closures, with one more planned for 2024.
A Tough Year for Retailers
Party City is not alone in its struggles. According to Coresight Research, there have been 7,327 store closings and 5,919 openings in the U.S. so far this year. This far outpaces closures in 2023, and is the highest number of store closures since 2020.
Experts Weigh In
“We started off 2024 believing this was going to be a strong year with store openings outpacing closings. However, 2024 has proven to be a challenging year for brick-and-mortar retailers,” said Coresight Research CEO Deborah Weinswig. “Consumers have little patience for long lines, out of stocks, and poorly merchandised stores. Party City has suffered from all three of these issues and has paid the ultimate price.”
Leave a Reply