Party City, a New Jersey-based party supply retailer, is reportedly planning to file for its second bankruptcy in two years. The company, headquartered in Woodcliff Lake, first declared Chapter 11 bankruptcy in January 2023, burdened by approximately $1.8 billion in debt. Despite emerging from bankruptcy in September 2023, Party City continues to face financial difficulties, including lagging sales and overdue rent on some of its more than 800 stores nationwide.
According to NorthJersey.com, Party City's previous bankruptcy plan involved closing over 60 underperforming stores and reducing its debt by $1 billion. The company also appointed Barry Litwin, former CEO of Globe Industrial Company, as its new chief executive officer. However, the company still struggles with over $800 million in debt, impacting its profitability and liquidity.
In an effort to revitalize its business, Party City introduced a new store format featuring "birthday worlds" for kids' and general birthday celebrations. The company also marked down prices on over 2,000 items by an average of 20% to appeal to budget-conscious consumers. Despite these efforts, the company faces ongoing challenges, including a class action lawsuit filed by former employees over layoffs in September.
NJBIZ reports that Party City, founded 38 years ago in East Hanover, remains the largest retailer of party goods in the U.S., Canada, and Mexico. The company is reportedly considering another Chapter 11 filing due to continued financial strain. Party City has not yet commented on the potential bankruptcy.