New York CNN —
Party City filed for bankruptcy protection on Tuesday after years of losses and weak sales.
The largest retail chain of party supplies and Halloween specialties in the United States announced in a regulatory filing that it has reached an agreement with debtors to reduce its $1.7 billion debt burden.
The company said it has secured $150 million in funding that will allow it to keep its stores open and operations running. As of October, the Company had a total of 761 Party City (PRTY) stores and 149 temporary Halloween City stores. As of 2021, Party City (PRTY) had more than 16,000 full and part-time employees.
Party City has battled competition for party supplies and decorations from big chain and online retailers for years. The advent of Spirit Halloween, a pop-up store model, also hurt Party City’s sales during the important Halloween season.
The company has also struggled with rising costs during the pandemic and a helium shortage, hurting balloon sales. Balloons are a “focus of our growth strategy and a key driver of our differentiated brand experience,” the company said in a regulatory filing.
Between 2017 and 2021, Party City’s revenue fell 8% to $2.2 billion. The company forecast flat sales in 2022. The company lost money every year between 2019 and 2021 and said it is on track to lose as much as $199 million in 2022.
Party City said in December it was at risk of being delisted from the New York Stock Exchange because its shares fell below an average of $1 a share for 30 trading days.
Other struggling retail chains also face an increased risk of bankruptcy in 2023 as consumers scale back spending.
Bed Bath & Beyon released a somber message about its future this month, warning that filing for bankruptcy was a possible outcome for the company.
Due to the deteriorating financial situation, there are “considerable doubts about the company’s ability to continue as a going concern”.