By Mrinmay Dey
(Reuters) – Party City, which has struggled since the COVID-19 pandemic, filed for bankruptcy protection in the United States for the second time in two years on Saturday as it plans to spin off its retail and wholesale operations build.
The retailer, which has been in business for more than 40 years and sells festive items from themed decorations to Christmas costumes, said all of its 700 stores in the country would remain open as it begins a sale.
The company, along with several of its subsidiaries, has filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. In a court filing, Party City Holdco listed both assets and liabilities in a range of $1 billion to $10 billion and estimated it had more than 10,000 creditors.
Party City Holdco’s senior lenders would provide the retailer with financial support needed to fund operations during the wind-down process, the Woodcliff Lake, New Jersey-based company said in a statement.
Struggling retailers often seek bankruptcy protection during the holiday season to take advantage of the cash injection provided by recent sales.
Party City, which operates both brick-and-mortar stores and an e-commerce website, said it would retain most of its 12,000 employees during the sales period to help with the wind-down process.
The company first filed for Chapter 11 bankruptcy protection in the US in January last year. Later that year, it reached a plan to emerge from bankruptcy, canceling about $1 billion in corporate debt.
The company has suffered lockdowns and store closures since the pandemic, along with inventory shortages and tight helium supplies due to global supply chain disruptions.
Amscan, a designer, manufacturer and distributor of party products operated by Party City Holdco, also filed for bankruptcy on Saturday.
(Reporting by Mrinmay Dey in Bengaluru; Editing by Frances Kerry)
