Party City, the largest party supply chain in America, is close to groping with terrible financial issues barely 13 months from a Chapter 11 bankruptcy. With its wide assortment of balloons and party accessories, the company is dealing with unpaid rents in multiple places and a declining sales record, which is largely being blamed on the effect of the after-pandemic state and the recurring helium shortages.
Party City opened its bankruptcy proceedings in January 2023, having debts of approximately $1.8 billion. After a restructuring process led by lenders such as Monarch Alternative Capital and Silver Point Capital, the company managed to clear $1 billion of its debts, allowing around 850 stores to remain operational. Despite such efforts, more than 60 stores have been closed, with examples including those located in Topeka, Kansas; Salina, New York; Joplin, Missouri; Owensboro, Kentucky; and Staten Island, New York.
In recent months, many of those stores have begun liquidation sales, offering up to 25% off. In particular, the Salina store, whose doors have been open for 20 years, plans to remain open until January 16, 2025, before closing permanently. Meanwhile, the Topeka store is set to close by January 18, 2025, and Staten Island’s Forest Avenue Shoppers Town location will cease operations in mid-January. Some stores, like the Albany, Georgia location, have already closed with final sales up to 90% off.
Post-pandemic struggles and competitive pressures
In 2019, prior to the pandemic, Party City reported sales of $2.35 billion. The pandemic, however, was very damaging for businesses that primarily cater to party hosts and attendees, for the simple yet obvious reason that there was no occasion to visit such shops while lockdowns and social distancing were enforced. Therefore, post-pandemic, the retailer started facing more and more challenges such as supply chain disruptions, inflation, and increased competition with retailers such as Walmart and Target, as well as the seasonal giant Spirit Halloween.
The dismal timing of these troubles could be seen by looking at its stock price, which at one point fell to an astounding 40 cents but had in earlier times peaked close to $23. Brad Weston, the former CEO, stated that although he was optimistic during the 2023 bankruptcy restructuring as to these events paving the way “to help strengthen Party City’s financial footing and enhance its ability to innovate,” Weston has since departed, with Barry Litwin succeeding him as CEO in August.
Industry analysts are not very convinced about the future of this company. According to Neil Saunders, managing director of Global Data Retail: “Party City has become something of an also-ran operation in the party supply market.” Saunders stressed the need to revamp the online presence of the company if it was to survive in an increasingly digitized retail world.
The retailer is also facing a raise in the price of helium, a crucial component of its signature party balloons, coupled with a downturn in consumer demand due to the uncertain global economic conditions. Party City’s once glorious reign in the party supply sphere looks to be facing an uphill battle in retaining the throne in an ever-evolving retail industry.
As the company teeters on the edge of bankruptcy, the future of its remaining stores and workforce remains uncertain. Whether Party City can overcome its financial hurdles and adapt to a rapidly evolving retail environment will ultimately determine its fate.
