of party It may be over.
According to reports, Party City is planning to file for bankruptcy for the second time in about two years as sales continue to decline.
The New Jersey-based party supplies and crafts retailer is behind on rent at some of its 850 stores across the United States. bloomberg news This was reported on Tuesday, citing a person familiar with the matter.
Party City, founded in New Jersey in 1986 by Steve Mandel, first filed for bankruptcy in January 2023 with about $1.8 billion in debt.
However, Party Supplier avoided liquidation and reduced its debt by about $1 billion by closing more than 60 stores, particularly in Kansas, New York, Missouri and Kentucky.
The company lifted its Chapter 11 protection in September.
For years, Party City has faced increasing competition from major retailers such as Walmart and Target, as well as event-based pop-up stores such as Spirit Halloween.
The pressure was compounded by the effects of the coronavirus pandemic, shortages of helium, the gas the chain relies on for its party balloons, and slowing consumer demand.
According to , Party City was expanding steadily before the pandemic, with sales of $2.35 billion in 2019. forbes.
The Post has reached out to Party City for comment.
Mandel last year blamed retailers' failures on bargains and a lack of selection in stores. The problem, he argues, was caused by private equity executives locking themselves into large supply deals with manufacturers that already owned about 80% of the supply.
Party City was acquired by private equity firms Berkshire Partners and Weston Presidio in 2005.
“They are [new owners] We took the top two things that make this company so special,” Mandel previously told the Post.
“In the beginning, we were a discount party superstore. Now we're not a discount store. Our prices are top dollar.”
“Secondly, there was diversity in Party City,” he added.
Both companies also own party supplies maker Amscan, which the founders said helped “eliminate competitors.”
But Mandel suggested that after the chain's acquisition, “all the innovation is long gone” and causing “huge problems.”
In 2012, Thomas H. Lee Partners acquired the company for $584 million less in a $2.69 billion deal, investing just 22% of the stock.
The following year, the owners forced Party City to borrow $338 million to pay dividends.
Party City's top market position and 35% profit margin meant it was relatively easy to use excess cash to pay off several years of loans.
The company then went public in 2015.
Soon, the party's supply chain didn't have much room to offer better prices than its competitors.
“If you can't afford to discount, you might not be able to afford to stay in business,” Mandel said.
He also pointed out that Party City failed to maximize profits during the critical Halloween period, which accounts for about a quarter of the company's sales.
In 2023, Mandel said, “Spirit Halloween opened 1,400 stores this fall, undeterred by the pandemic,” and “Party City opened 100 Halloween City pop-up stores.” .
