By Mrinmay Dey
(Reuters) - Party City, which has been struggling since the COVID-19 pandemic, filed for Chapter 11 bankruptcy protection in the United States on Saturday for the second time in two years as it plans to wind down its retail and wholesale operations.
The retailer, which has been in business for over 40 years and sells party supplies from themed decorations to Christmas costumes, said that all of its 700 stores in the country would remain open as it commences a going-out-of-business sale.
The company along with certain of its subsidiaries filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. In a filing with the court, Party City Holdco (OTC:PRTYQ) listed both assets and liabilities in the range of $1 billion to $10 billion and estimated to have more than 10,000 creditors.
Party City Holdco's senior lenders would provide the retailer with financial support necessary to fund operations through the wind-down process, the Woodcliff Lake, New Jersey-based company said in a statement.
Troubled retailers often seek bankruptcy protection during the holiday season to take advantage of any cash infusion provided by recent sales.
Party City, which operates both brick-and-mortar stores and an e-commerce website, said it would retain most of its 12,000 employees during the sale period to assist with the wind-down process.
The company first filed for Chapter 11 bankruptcy protection in the U.S. in January last year. Later that year it reached a plan to exit bankruptcy, which saw a cancellation of about $1 billion in company debt.
The company has suffered since the pandemic due to lockdowns and store closures, along with inventory shortages and tight helium supplies due to global supply chain disruptions.
Amscan, a designer, manufacturer, and distributor of celebration products that is operated by Party City Holdco, also filed for bankruptcy on Saturday.