team It may end.
According to a report, Party City is planning to file for its second bankruptcy in nearly two years as the company’s sales figures continue to struggle.
The New Jersey-based party supply and craft retailer is behind the move to rent out some of its 850 locations across the US. Bloomberg News The report was made on Tuesday quoting people familiar with the matter.
Party City was first founded by Steve Mandel in New Jersey in 1986 filed for bankruptcy Debt of approximately $1.8 billion due in January 2023.
However, the party supplier avoided liquidation and reduced its debt by approximately $1 billion by closing more than 60 stores, particularly in Kansas, New York, Missouri and Kentucky.
The company exited Chapter 11 protection in September.
Party City has faced increasing competition over the years from powerhouse retailers like Walmart and Target and occasion-based pop-up stores like Spirit Halloween.
The pressures increased due to the effects of the COVID pandemic, shortages of helium — a gas the chain relied on for its party balloons — and decreased consumer demand.
Party City was successfully expanding before the pandemic and had sales of $2.35 billion in 2019 forbes,
The Post has contacted Party City for comment.
Last year, Mandel blamed the retailer’s downfall on a lack of bargains and variety in its stores – a problem he claims arose when private equity executives locked it into a big supply deal with a manufacturer. , which already owned about 80% of the supply.
Party City was purchased by private equity firm Berkshire Partners and Weston Presidio in 2005.
“They [new owners] “The top two things that make this company so special stood out,” Mandel previously said. Post,
“At first, we were the discount party superstore. Today, it is not a discount store. Prices are top dollar.
“Second, there was a lot of diversity in Party City,” he said.
The companies also owned party supplies maker AmScan, which helped “sweep out the competition,” the founder said.
However, Mandel suggested that after the chain’s acquisition, “all the innovation went away for a long time,” causing a “big problem.”
In 2012, Thomas H. Lee Partners bought the company for $584 million in a deal worth $2.69 billion, investing only 22% in the equity.
The following year, the owners borrowed $338 million from Party City to pay themselves the dividend.
Party City’s leading market position and 35% profit margin made it relatively easy to take on extra cash to pay off the loan for a few years.
The company went public in 2015.
Soon, the party supply chain did not have much scope to offer better prices than its competitors.
“If you can’t afford to discount, you probably can’t afford to stay in business,” Mandel said.
He also pointed to Party City’s failures to maximize profits during the key Halloween period, which accounts for approximately one-quarter of the company’s sales.
“Spirit Halloween opened 1,400 stores this fall and they were unbothered by the pandemic,” Mandel said in 2023. Party City featured 100 Halloween City pop-up stores.
