Party City files for bankruptcy

New York
CNN
–

Party City filed for bankruptcy protection on Tuesday, hurt by competition and years of financial losses.

The largest retail chain specializing in Halloween parties in the United States said in a regulatory body filing It has reached an agreement with debt holders to reduce its debt burden of $1.7 billion.

The company said it has secured $150 million in financing that will allow it to keep its stores open and operate its operations. As of October, the company had 761 total city parties

(PRTY) Stores and 149 pop-up stores in Halloween City. In 2021, Party City

(PRTY) It had more than 16,000 full and part time employees.

Party City has for years battled competition for party goods and decorations, especially from big box chains and online retailers that sell a wide variety of merchandise.

Target in particular has increased its party supply and special event merchandise, said Neil Saunders, an analyst with GlobalData Retail.

“This is aimed squarely at the family demographic that has traditionally shopped at Party City,” he said.

Appearance of Halloween spirita pop-up shop model, has also slashed Party City sales during the main Halloween season.

However, competition is not the only factor causing Party City’s downfall.

The company has had to contend with rising costs during the pandemic and Helium deficiency, which hurt the very important balloon business. The company said in a regulatory filing that the balloons are “a focal point of our growth strategy and are a key driver of our distinctive brand experience.”

Between 2017 and 2021, Party City sales fell 8% to $2.2 billion. The company expected sales to remain flat in 2022. The company also lost money every year between 2019 and 2021 and said it was on track to lose up to $199 million in 2022.

Party City said in December that it was at risk of delisting from the New York Stock Exchange because its stock had fallen below $1 per share for 30 trading days.

Party City’s bankruptcy could be a sign of trouble in the retail industry this year.

Retailers were a Weak vacation stretchRetail sales in December showed that could force some businesses to close stores or file for bankruptcy.

Other chains are struggling High risk of bankruptcy With declining consumer spending.

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(BBBY) This month he issued a grim message about the company’s future, warning that a bankruptcy declaration is a possible outcome for the company.

There is “significant doubt about the company’s viability” due to its deteriorating financial situation.