Party City faces second bankruptcy in 2 years

The party may finally be over for one of the largest retailers of balloons and costumes.

A Party City store in Gaithersburg, Maryland

Party City Holdco Inc. is considering bankruptcy within the next few weeks for the second time in two years, Bloomberg reportedciting anonymous sources. It has stopped paying rent in some places as its cash dwindles, according to the outlet.

The earlier bankruptcy allowed Party City to write off $1 billion of its $1.8 billion in debt and close 60 stores. This time, Party City’s bankruptcy could result in the party supply retailer closing all 700 of its stores nationwide.

Party City — owned by creditors including Silver Point Capital, which acquired the retailer after its bankruptcy in 2023 — has struggled with sluggish sales for years. Its debt relief has not been enough to offset sluggish sales, according to Bloomberg. The company has also been hampered by a national shortage of helium.

Party City is part of a wave of national retailers facing bankruptcy or liquidation, including Big Lots, Lumber Liquidators and Conn’s. Through November, retailers have closed more than 7,100 stores across the country, a 69% jump from the same period in 2023, CBS News reported that recentlyciting data from CoreSite. 45 retailers filed for bankruptcy protection this year, much higher than 25 in 2023.

Bloomberg reported that the timing of Party City’s potential bankruptcy is still in flux and that the final plans could still change.