One Of America's Favorite Party Retail Stores Could Be Filing For Bankruptcy In 2025

2024 has been a tough year for national retailers with a number of them forced into bankruptcy and store closings. Big Lots became the worst such example of the year when it filed a September 9 petition for creditors' protection and sold off its assets to Nexus Capital Management, announcing plans to close 550 of 1,400 stores in the process. LL Flooring, the home improvement retail giant, similarly filed for Chapter 11 bankruptcy on August 11, closing 211 stores as a result.

Other large and well-known retail sector failures that caused major retailers to shut down hundreds of stores this past year included Big Lots, Express, and Jo-Ann Fabric and Craft stores. The retail segment has reported numerous bankruptcy protection filings in the past year due to the knock-on impacts of the Covid-19 pandemic, larger debt payments because of rising interest rates, and inflation effects raising business costs.

One of the latest firms that is in trouble is a favorite party retail store chain Party City. Bloomberg reported that the shaky outlet is pondering asset sales or even a Chapter 11 filing. While continuing a worrying economic trend in the sector, this is not the first time that Party City has struggled in recent years. Even though Cyber Monday spending just hit an absurd new record, the company has not been able to benefit.

Parent company Party City Holdco has approximately 850 costume and party supply outlets located in the United States, Mexico, and Canada. The major retailer has struggled in the recent past when it was forced to seek bankruptcy protection on January 17, 2023. A resulting agreement previously forced it to close 60 locations.

Party City struggled because of several difficult challenges. The Covid-19 pandemic impacts led them to shut down outlets while affecting its corporate supply chain. A serious helium shortage used in mainstay balloon products also hit the company hard as it grappled with already rising inflation. These higher costs of business proved too much for the teetering retail giant to bear.

Party City's bankruptcy filing revealed that it struggled under more than $1.45 billion in debt. The company agreed to a restructuring deal with creditors Silver Point Capital and Monarch Alternative Capital that canceled around $ billion of debt, funded $150 million of debtor in possession financing, and gave all reorganized equity to its lenders. This arrangement seemed like it would turn things around for Party City. The newly reorganized corporation gained access to a $562 million credit facility and received $75 million in investment as it concluded its bankruptcy. October 12 of 2023 saw Party City successfully emerge from bankruptcy protection, per The Street.

As recently as May 2024 the situation had been looking up for the reorganized Party City. On May 4th, the chain reopened a store in East Hanover, New Jersey. April 6th saw the West Hills, California store reopen, per Nasdaq press releases on the firm. The brief period of apparently good news masked new problems for the chain though.

Now Party City reputedly is suffering from a shortage of its cash on hand, running late on rent for some locations, and experiencing slowing sales. All of these combined factors are creating hardships for the firm in covering its still huge debt load payments. These issues would be enough for a corporation in the best of times.

A little-discussed additional problem for Party City concerns one of its top suppliers. Anagram Balloons was once an affiliate of the party supply chain. Now Anagram has been forced to file for Chapter 11 bankruptcy in Houston in an effort to sell off its assets to primary creditors of its first-lien notes. Anagram Balloons also supplies products directly to huge retail names like dollar stores giant Dollar Tree, Walmart, and Canadian Tire. It seems that the Party City and Anagram Balloons woes could have unexpected effects on other major retailers in the near future.