Party City files for bankruptcy

(CNN) — Social gathering Metropolis filed for chapter safety Tuesday after years of losses and weak gross sales.

The most important occasion items and Halloween specialty retail chain in the USA stated in a regulatory submitting that it reached an settlement with debtholders to chop its $1.7 billion debt load.

The corporate stated it secured $150 million in financing that can permit it preserve its shops open and operations working. As of October, the Firm had 761 whole Social gathering Metropolis shops and 149 short-term Halloween Metropolis shops. In 2021, Social gathering Metropolis had greater than 16,000 full- and part-time workers.

Social gathering Metropolis has struggled for years towards competitors for occasion items and decorations from big-box chains and on-line retailers. The emergence of Spirit Halloween, a pop-up retailer mannequin, additionally lower into Social gathering Metropolis’s gross sales throughout the important thing Halloween season.

The corporate additionally needed to take care of rising prices in the course of the pandemic and a helium scarcity, which harm balloon gross sales. Balloons are a “point of interest of our progress technique and are a key driver of our differentiated model expertise,” the corporate stated in a regulatory submitting.

Between 2017 and 2021, Social gathering Metropolis’s gross sales dropped 8% to $2.2 billion. The corporate projected gross sales to stay flat in 2022. The corporate additionally misplaced cash yearly between 2019 and 2021 and stated was on monitor to lose as much as $199 million in 2022.

Social gathering Metropolis in December stated it was vulnerable to a de-listing from the New York Inventory Change as a result of its inventory fell underneath a median of $1 a share for 30 buying and selling days.

Different struggling retail chains are additionally at heightened threat of chapter in 2023 as customers pull again their spending.

Mattress Tub & Beyon this month issued a grim message about its future, warning {that a} chapter submitting is a potential end result for the corporate.

There’s “substantial doubt concerning the firm’s means to proceed” due to its worsening monetary scenario.