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Party City seeks bankruptcy protection over rising costs

By 01/18/2023 8:04 PMNo CommentsBy YidInfo Staff

Party City sought Chapter 11 bankruptcy relief after having trouble with growing costs and declining consumer expenditure.

The Woodcliff Lake, New Jersey-based corporation said that its franchise locations, subsidiaries outside of the country, and foil balloon Anagram business are not affected by the restructuring and will continue to be essential parts of its operations.

Customers can still shop on the firm website, and Party City Holdco Inc. announced that over 800 corporate-owned and franchise stores across North America would stay open.

The chain is preparing an accelerated reorganization, which it claims will significantly reduce its debt and free up money.

The Ad Hoc Group has agreed to provide debtor-in-possession finance for $150 million to the corporation.

It claimed that the financing, pending court clearance, would give it enough money to carry on with business as usual.

Before the market opened on Wednesday, shares increased by more than 10%.

Walmart and Target have been putting more pressure on Party City for years, and that pressure has gotten worse in an era of rising costs, notably for the helium used in party balloons and diminishing customer demand.

When Party City reported a 3.2% decline in comparable store sales in November, the company’s quarterly losses grew.

Although on the lower end, overall sales were within estimates.

The Securities and Exchange Commission warned Party City in December that it was in danger of having its stock delisted from the New York Stock Exchange for failing to maintain an average share price of $1 over a 30-day period.

Currently, the price of shares is around 40 cents.

The company was listed on the stock market in April 2015 for $17 per share, reaching a high of $22.60.

Party City anticipates that the corporate reorganization will be finished in the second quarter.




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