(Bloomberg) -- Party City Holdco Inc. is considering options including a sale or another potential bankruptcy, just over a year after it emerged from Chapter 11, according to people with knowledge of the matter.
The New Jersey-based retailer, which sells balloons and other party supplies, is behind on rent at some locations and running out of cash, said the people, who asked not to be identified discussing a private matter.
The retailer’s struggles stem from years of lagging sales that have left it unable to keep pace with a sizable debt load. It entered bankruptcy in 2023 with about $1.8 billion in debt.
Lenders including Monarch Alternative Capital and Silver Point Capital took over ownership of Party City when it exited Chapter 11 protection and reduced its debt by about $1 billion and closed more than 60 stores. The party shop avoided liquidation, unlike some of its struggling peers, such as Bed Bath & Beyond Inc., 99 Cents Only Stores LLC and furniture retailer Conn’s, Inc.
Representatives for Party City and Monarch did not respond to requests for comment. A representative for Silver Point declined to comment.
Emerging from bankruptcy with more than $800 million of debt still in place has continued to drag down profits and strain Party City’s liquidity, one of the people said.
(Updates to add recently-liquidated retailers’ names and store closures in fourth paragraph.)
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