Listen to this articleA month after declaring Chapter 11 bankruptcy for the second time in two years, Party City says it has found a buyer.
In a Jan. 24 press release, the Woodcliff Lake-based specialty retailer announced a stalking horse agreement to sell “substantially all of its intellectual property and related wholesale operating intangible assets” to party goods supplier New Amscan PC LLC.
Party City Chief Financial Officer Dan Lamadrid said in a statement, “We are pleased that this transaction offers a promising future for the Party City brand as we work to maximize value for the benefit of our stakeholders.”
New Amscan is an affiliate of Ad Populum, a Santa Monica, Calif.-headquartered designer and wholesaler of gifts, home accents, costumes and collectibles.
Ad Populum CEO Joel Weinshanker added, “We are excited to lead the transformation of the Party City and Amscan brands. By combining our strengths in sourcing and distribution with Party City’s legacy, we are confident in our ability to innovate and grow in the party supply market, delivering products that inspire and elevate life’s celebrations.”
The sale is subject to approval by U.S. Bankruptcy Court for the Southern District of Texas, the venue where Party City filed for Chapter 11 in December 2024. If a higher or otherwise better offer emerges by Feb. 4, the court will hold an auction within two days.
Sales underway
In its bankruptcy petition, Party City said that if its assets don’t sell, the company expects to liquidate all retail stores and wholesale inventory locations.
Closing sales are already underway at Party City’s more than 750 stores and will continue through the end of next month. Altogether, the company expects to retain more than 95% of its 12,000 employees to assist with winding down stores and distribution centers.
Party City already closed its headquarters. Less than 24 hours before the company filed for Chapter 11, corporate staffers were told the business was shutting down immediately and they were being let go at the end of the day.
Founded 38 years ago in East Hanover, Party City is the largest retailer of party goods in the U.S., Canada and Mexico.
When the company filed for bankruptcy protection in January 2023, it had about 820 stores (770 owned) and about $1.8 billion in debt. As part of its restructuring agreement, the retailer wiped away nearly $1 billion in debt, renegotiated lease terms and closed more than 60 underperforming locations.
After emerging from bankruptcy in September 2023, the company came out of the process with a reduced footprint of 750 stores, strengthened capital structure and improved liquidity. However, it still had a debt load of more than $800 million, which dragged down profits and strained liquidity.
The retailer listed assets of between $1 billion to $10 billion, along with liabilities of $1 billion to $10 billion, according to last month’s bankruptcy petition. Party City also said it has between 10,000 and 25,000 creditors.
Ahead of the filing, reports began to surface that the company was behind on rent at some locations and running out of cash.
