The company said its more than 800 stores throughout North America will remain open.
The company has secured a commitment for $150 million in debtor-in-possession financing. It said the financing, which is subject to court approval, would provide ample cash to continue operations.Party City for years has faced growing competition from Walmart and Target and increasingly from occasion-based pop-up stores such as Spirt Halloween. That pressure has intensified in an era of rising prices, including for helium used in party balloons, and slowing consumer demand.
“Party City used to be one of the best games in town, but it is now something of an also-ran operation,” said Neil Saunders, managing director of GlobalData Retail. “There is likely still something of a role for Party City, but the company needs to financially restructure and to rethink its approach.”
Saunders believes Party City should think about how it reaches customers including looking at more attractive locations for its stores and beefing up its e-commerce site. widened, reflecting a 3.2% drop in comparable store sales. Overall sales were within expectations, but at the lower end. In December, the Securities and Exchange Commission warned Party City that it was at risk for being delisted by the New York Stock Exchange for failing to maintain an average $1 per share stock price over a 30-day period.Party City expects the company restructuring to be completed in the second quarter.
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