Party City, With 108 Stores In The Golden State, Files For Bankruptcy

CALIFORNIA — Party City, the go-to store in the Golden State for Halloween and other essential party goods, filed for bankruptcy protection this week, but the bulk of its 761 U.S. stores and 149 Halloween City temporary stores are expected to continue business as usual.

As part of the filing, Party City also sought approval to close 28 properties nationally with additional store closures under consideration. Specific locations for possible closures in California were not available.

Party City, the largest party goods, Halloween and specialty retail chain in the country, has 108 stores in California, including 25 stores in Los Angeles county and another 25 in the Bay Area.

“As we take this important step to put our business on stronger financial footing for the future, we are as committed as ever to inspiring joy by making it easy for our customers to create unforgettable memories," Party City CEO Brad Weston said. "We appreciate the commitment of our team members and the continued support of our partners as we further enhance our position as the ‘go to’ one-stop-shop for celebrating life’s special moments.”

In the Chapter 11 bankruptcy filing with the U.S. Securities and Exchange Commission, Party City HoldCo Inc. said it had reached an agreement with its creditors to cut $1.7 billion from its debt load.

Also, the party goods retailer said it had secured $150 million in financing that will allow it to keep stores open. In 2021, the permanent and temporary Party City stores employed more than 16,000 people in full- and part-time positions, CNN reported.

Party City has faced increased competition from other retailers that sell a wider variety of party merchandise. Its competitors include Target, which has increased its inventory of party and special events merchandise, and Spirit Halloween pop-up stores.

Party City has also faced rising costs during the pandemic, as well as a helium shortage that deflated its important balloon business and caused the company to shutter 45 Party City stores in 2019. The balloon business is critical to the company’s growth strategy and helped differentiate Party City from its competitors, the company said in a regulatory filing, according to the CNN report.

Party City’s sales dropped 8 percent to $2.2 billion from 2017 to 2021. The company also said it lost money every year from 2019 to 2021, and was on track to lose up to $199 million when the 2022 books are closed out.

In December, Party City told its investors it was on the verge of being de-listed by the New York Stock Exchange because stock fell under an average of $1 a share for 30 trading days, according to CNN.