Party City Shutters Stores and Plans to Go Private

Bankrupt party supply retailer Party City is closing more stores as it prepares to go private.

The company last week shuttered nine stores in five different states and will auction the locations off later this week, according to A&G Real Estate Partners, its real estate advisor.

That news followed an announcement in February that Party City would close 22 other stores.

And in a regulatory filing earlier this month, Party City said its businesses would emerge from Chapter 11 proceedings as “non-publicly reporting companies.”

Party City announced in January it was seeking bankruptcy protection, a move CEO Brad Weston framed as a bid to get the company “on stronger financial footing” and “continue to innovate and elevate the customer experience.”

As PYMNTS noted at the time, the news made Party City a casualty of a broader cut back among consumers on non-essential spending. The company had said as much in an earnings report late last year, saying its customers were “facing significant inflationary pressures.”

The retailer’s crucial Halloween sales, while up year over year, still came in at the lower end of expectations, as “macro pressures impacted customers’ ability and willingness to increase spend on Halloween celebrations,” Weston said.

It would make sense that consumers are spending less on things like party supplies, as continued inflation hampers spending on non-essential items.

“Disposable income — the net amount in the household budget after taxes — bears the brunt of inflation,” PYMNTS wrote in February, noting research showing the cost of essentials as a share of disposable income at 22.4%.

Findings from our “Consumer Inflation Sentiment” report show that 69% of consumers have been changing their shopping habits, with 59% reporting that they have cut down on non-essential grocery items.

This month has seen two other high-profile retail bankruptcies driven — in part — by shifts in consumer spending habits. Bed Bath & Beyond filed for Chapter 11 protection earlier this week after a failed bid to raise funds to stay afloat.

And David’s Bridal said earlier this month that it will be forced to close all of its stores unless it finds a buyer following its recent bankruptcy.

As for Party City, some of its old stores have gotten new life, with A&G saying it had auctioned off five former locations: four to arts and crafts supply retailer Michaels and the remaining one to discount chain Five Below.

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