Party City prepares to file for bankruptcy
Party supplies retailer struggling with $1.8B in debt
Party City Holdco, Inc., was anything but festive this week, as the company appears to be preparing to file for bankruptcy and possibly turning over ownership to creditors, Bloomberg reported.
The party supplies retailer, which says it operates more than 800 stores in North America, has hired AlixPartners as a restructuring adviser, according Reuters, citing a report from the Wall Street Journal.
The retailer, known for party accessories and decorations including balloons, has struggled amid a helium shortage, as well as high inflation and shifting consumer behavior, according to Bloomberg. Investors were also reportedly disappointed with weak Halloween sales.
Party City, which has about $92 million in cash available against $1.8 billion in debt, is in talks of a debt-for-equity swap with a debtholder group, Bloomberg reported. The company is likely to miss a debt payment in February and creditors are positioned to take control of the company if a deal is made, the outlet reported.
Shares of the company fell to 18 cents against the news at the close of the market Friday.
While some bricks-and-mortar retailers — including discount chains such as Dollar Tree and Dollar General — have thrived amid the fallout of the COVID-19 pandemic, others, such as Party City, Bed Bath and Beyond, and Things Remembered, have struggled.
On the heels of worse-than-expected sales, Bed Bath and Beyond, which is carrying $1.2 billion in debt, said it is experiencing a cash crunch and warned that it is mulling bankruptcy, CNBC reported.
Ohio-based Things Remembered, a gift retailer with about 175 stores nationwide, announced it is closing its doors altogether by Friday, according to Crain’s.
— Ted Glanzer