Party City, With 21 VA Stores, Files For Bankruptcy

VIRGINIA — Party City, the go-to store in Virginia for Halloween and other essential party goods, filed for bankruptcy protection Tuesday, but its 761 U.S. stores and 149 Halloween City temporary stores are expected to continue business as usual.

Party City, the largest party goods, Halloween and specialty retail chain in the country, has 21 stores in Virginia, including locations in Fredericksburg, Chantilly, Woodbridge, Fairfax, Leesburg, Falls Church, Manassas, and Springfield. Find the store closest to you.

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.

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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.