Party City Holdco Inc. has officially filed for Chapter 11 bankruptcy for the second time in two years, submitting the petition in Texas on December 21, 2024. This latest filing comes just over a year after the company emerged from its first bankruptcy in October 2023, during which it successfully reduced its debt by nearly $1 billion and cut its store count to approximately 800 [dd8083d3].
The current bankruptcy filing is a significant blow for the retailer, which plans to wind down around 700 stores as part of its restructuring efforts. Despite the closures, the company has announced that over 95% of its 12,000 employees will be retained to assist with the wind-down process [dd8083d3].
Party City has faced mounting challenges, including inflation, rising wages, and fierce competition from online retailers, which have all contributed to its financial struggles. In the third quarter of 2023, the company reported a substantial net loss of $91 million, highlighting the difficulties it has encountered in the current retail landscape [dd8083d3].
Additionally, the company's balloon-manufacturing affiliate, Anagram Holdings, also filed for bankruptcy in 2023, with lenders forgiving $168 million in debt as part of its restructuring [dd8083d3]. This series of financial setbacks raises questions about the long-term viability of Party City in an increasingly competitive market, as it attempts to navigate the complexities of retail operations amidst economic pressures [0b508ea4].