Party City Holdco, parent company of Party City, will close 22 underperforming stores as part of its Chapter 11 reorganization. The retailer’s plans were revealed in court documents filed with the U.S. Bankruptcy Court for the Southern District of Texas earlier this month, and the move could presage additional store closings as the retailer seeks to right-size its brick-and-mortar footprint.
Faced with pandemic-related declines in social activities and high inflation that saw consumers cutting discretionary spending, Party City filed for bankruptcy in January 2023. At the time the retailer operated 770 company-owned stores and 53 franchise locations. Also in January, the retailer had sought to be released from lease agreements for an additional 28 stores that it already had closed.
Party City reported net sales of $502.2 million for Q3 2022, a 1.6% decline from the same period the previous year. Comparable sales decreased 3.2% compared to Q3 2021. The company has not yet reported Q4 or full-year 2022 results. In December the retailer was warned that it faced delisting from the New York Stock Exchange if its share price failed to rebound during the next six months.