Party City Files for Bankruptcy

On Tuesday, Party City filed for Chapter 11 bankruptcy protection. America’s largest party supply store has been struggling to recover after the pandemic and as high inflation affects consumer spending.

According to NBC, “Troubled retailers often seek bankruptcy protection following the holiday season to take advantage of the cash cushion provided by recent sales.”

Additionally, Party City “reported $1 billion to $10 billion of estimated assets and liabilities, and said it had obtained $150 million in debtor-in-possession financing to support its operations.”

Party City’s business had been thriving prior to the pandemic, reaching approximately $2.35 billion in revenue by 2019, per CNBC. However, lockdowns and store closings mixed with inventory problems and a helium shortage brought on problems for the party supply retailer.

NBC reported that “shares of the party goods company were up about 11% at 41 cents before being halted premarket on Wednesday.” After the Wall Street Journal reported that a bankruptcy filing was on the horizon for the company, stock fell as much as 57%.