Party City Holdco Inc becomes latest firm to file for Chapter 11 bankruptcy protection

• Party City Holdco Inc recently filed for Chapter 11 bankruptcy protection.
• Party City announced that it has struck a pre-negotiated agreement.
• The company listed estimated assets and liabilities between $1 billion and $10 billion.

As persistently increasing inflation has a negative impact on consumer spending, Party City Holdco Inc (PRTY.N) filed for Chapter 11 bankruptcy protection on Tuesday. This makes it the most recent victim in the US retail sector.

Following the holiday season, struggling retailers frequently file for bankruptcy to benefit from the financial cushion offered by previous sales.

This month, Bed Bath & Beyond Inc (BBBY.O) expressed concerns about its capacity to operate moving forward. View More

Party City, a company situated in Woodcliff Lake, New Jersey, announced that it has struck a pre-negotiated agreement with a group of bondholders to support an “expedited restructuring” that will be finished in the second quarter.

It listed estimated assets and liabilities between $1 billion and $10 billion and claimed to have secured $150 million in debtor-in-possession finance to support its activities.

Since the Covid-19 epidemic, the party supply retailer has struggled with decreased sales as a result of lockdowns and store closures, as well as inventory shortages and limited supplies of helium as a result of worldwide supply chain disruptions.

The business, which runs more than 800 company-owned and franchised stores across North America, also had to contend with rising freight, labour, and raw material costs as it accelerated delivery schedules to guarantee that it had enough inventory on hand.

The company stated that the bankruptcy procedures did not affect its foreign companies, franchise stores, or its Anagram business and that its stores would remain operational.

The firm that makes party supplies’ shares were up around 11% at 41 cents on Wednesday when the premarket trading was stopped. After the Wall Street Journal reported that the company would file for bankruptcy within weeks, the shares dropped as much as 57% on January 6.

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