Party City Is Closing at Least 22 Stores, Starting This Month
The party supplies chain is restructuring its retail footprint following a bankruptcy filing.
The party will soon be over for more people in the U.S. Back in Sept. 2022, Wisconsin-based party chain 50-50 Factory Outlet announced that it was going out of business, closing all four of its remaining stores in the state. But now, a bigger brand is following suit. After sharing some clarity on its financial struggles at the beginning of the year, Party City is planning to close some of its stores as a result. Read on to find out which 22 locations are slated to shutter soon and why more might follow over time.
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Party City filed for bankruptcy last month.
Following rumors of a potential filing, Party City officially filed for Chapter 11 bankruptcy protection on Jan. 17. The retailer's comparable sales were down by 3.2 percent in the last quarter, and it had $1.67 billion in debt, according to the latest financial report released Nov. 2022. As a result, Party City is using bankruptcy as a way to restructure its debt and keep its doors open, CNBC explained.
"As we take this important step to put our business on stronger financial footing for the future, we are as committed as ever to inspiring joy by making it easy for our customers to create unforgettable memories," Party City CEO Brad Weston said in a statement. "We appreciate the commitment of our team members and the continued support of our partners as we further enhance our position as the 'go to' one-stop-shop for celebrating life's special moments."
But this step towards this future won't happen without some losses.
The retailer is now planning to close several stores.
When it filed for bankruptcy, Party City had 770 company-owned stores and 53 franchised stores. But the party supplies chain will be paring down its retail footprint in the U.S. as part of its restructuring efforts. Party City is planning to close at least 22 stores following its bankruptcy filing last month, Retail Dive reported. According to the news outlet, documents filed in bankruptcy court on Feb. 16 indicate that Party City will auction off an initial 12 stores, and then close another 10 locations later in February.
"Our work on our lease portfolio is moving very quickly, with a plan for us to exit locations that do not meet the key financial metrics required for our go-forward fleet," Marc Ehle, Party City's executive vice president of enterprise operations, said in a statement.
Best Life has reached out to Party City to find out more about these closures and when exactly they will happen but has not yet heard back.
A dozen Party City stores are now being auctioned off.
Operating as a real estate advisor to Party City Holdco Inc. (PCHII), A&G Real Estate Partners announced on Feb. 16 that it is auctioning off 12 Party City leases as part of the first phase of closures. According to a press release, the affected stores span six states: New York, Missouri, Michigan, Oklahoma, Oregon, and West Virginia.
"We have a wide variety of users who have begun showing interest, including gyms, dollar stores, local retail operators, furniture users, local specialty retailers, and non-retail users such as medical," A&G Managing Director Alexandra Graiser said in a statement.
The stores currently up for auction range in size from 9,000 to 28,000 square feet, with some operating as freestanding locations while others are located in shopping centers or strip malls. New York will lose the most stores, with four leases being auctioned in Manhattan, the Bronx, Buffalo, and Irondequoit. Meanwhile, three stores will leave Michigan from the cities of Ft. Gratiot, Benton Harbor, and Jackson, while Missouri will lose locations in St. Joseph and Belton. The other stores being auctioned off in this set are located in Lawton, Oklahoma; Corvallis, Oregon; and Martinsburg, West Virginia.
But more locations will close after this.
In the second phase of closures, 10 more stores will shutter in several different states. Georgia will lose two Party City locations in this phase—one in Rome and the other in Cartersville. Meanwhile, the other closures will affect individual locations in West Paterson, New Jersey; Corpus Christi, Texas; Manhattan, New York; Beckley, West Virginia; Slidell, Louisiana; Holland, Missouri; Waterloo, Iowa; and Bradley, Illinois.
According to court documents, all of these locations are to be sold before the end of April. But some appear to be closing much sooner than that. For example, the Beckley Party City in West Virginia is set to shutter on March 27, local news outlet WVNS reported. On the other hand, an employee of the Holland Party City in Missouri told the Holland Sentinel that its store will remain open until April 29 unless all inventory is sold before then.
But these 22 stores might not be all that Party City is getting rid of. According to the Feb. 16 press release, A&G will continue "auctioning additional leases in the weeks ahead, with the total number depending on the outcome of ongoing negotiations between A&G and Party City landlords."