Party City files for Chapter 11 bankruptcy protection

• Party City Holdco Inc. said it is asking the court to "maintain business-as-usual operations" to keep its 800-plus stores open, pay wages and benefits, and "honor customer programs and policies."
• The company said it has secured $150 million in debtor-in-possession financing from an ad hoc group that needs to be approved by the court.

What they're saying: Debt is not the only factor for Party City, GlobalData retail analyst Neil Saunders said Wednesday.

• “A downswing in demand for party products has also put pressure on the business,” Saunders said. “Much of this is down to two factors: increased competition and a more constrained consumer.”
• "There is likely still something of a role for Party City, but the company needs to financially restructure and to rethink its approach,” Saunders said, adding many of its stores are in "sub-optimal locations which are poor at driving passing trade."

Flashback: The New Jersey-based party supplies company has been struggling before the pandemic and announced store closings in 2019.

• The retailer has also been dealing with an ongoing global helium shortage.

Inflation has tightened consumer budgets, a trend reflected in the financial health of other big box retailers. Bed Bath & Beyond recently warned that it could file for bankruptcy protection and announced a new round of store closings last week.

Editor's note: This story has been updated with additional information.

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