The retail sector had a tough run in 2024, with several high-profile bankruptcies and store closures. More than 7,300 locations shuttered last year, marking an almost 58% uptick from 2023, according to Coresight Research.
Express, a shopping mall staple, filed for bankruptcy in April, due in part to a shift in fashion trends and a general decline in foot traffic. Big Lots filed for bankruptcy protection in September, citing a decline in sales.
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Consumer behavior shifted in 2024 as a result of stubbornly high inflation and interest rates. As of October, around 25% of all U.S. households were living paycheck to paycheck, according to Bank of America, forcing many people to alter their spending habits and conserve funds.
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As a result, one popular party supply store filed for bankruptcy for the second time in late 2024. But whether it’s gone for good is now a big question mark.
Party City sales slide
Party City filed for bankruptcy in January 2023 but managed to stay alive by restructuring and reducing its debt. But that victory was short-lived.
In December 2024, Party City filed for bankruptcy for a second time, citing sluggish consumer demand, high levels of inflation, and heavy competition from not just big-box retailers, but also seasonal pop-ups like Spirit Halloween and online giants like Amazon.
As a result, the iconic retailer announced plans to wind down all of its operations and shutter roughly 700 stores.
Bankrupt Party City sells its intellectual property and other assets.
Image source: Shutterstock
Will the Party City brand live on?
Based on Party City’s liquidation plans, it seemed as though consumers would have to kiss the beloved chain goodbye for good. But in late January, Party City announced that it had entered into an agreement to sell substantially all of its intellectual property and related wholesale operating intangible assets to New Amscan PC, LLC, an affiliate of Ad Populum, LLC.
Of course, that begs the question: What becomes of Party City, and will the store concept continue to exist under another name?
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Ad Populum is a global leader in pop culture merchandise and costumes, so it may be poised to revive Party City under a different brand.
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Joel Weinshanker, chief executive officer of Ad Populum, commented, “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.”
It’s unlikely that Party City stores themselves will survive the events of the past two months. The party supply giant has been aggressively unloading inventory in a series of liquidation sales.
Top retail bankruptcy filings in 2024
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The chain has also been auctioning its store leases as part of the bankruptcy process. So even if its new owner wants to reopen stores in its name, it would need to find available locations.
But the reality is, even with new branding and an inventory refresh, it’s questionable as to whether the party supply store model is sustainable in an age when big-box retailers can undercut niche stores and Amazon can offer competitive pricing on just about anything.
And in an era where consumers are continuing to do a lot of their purchasing online, shoppers can easily turn to sources like Oriental Trading Company for party supplies in bulk and on the cheap.
The sad reality is that niche stores are having a hard time staying alive across the board. Fabric and crafts giant Joann filed for bankruptcy a second time just a few weeks ago. And while the Container Store recently exited bankruptcy with its store footprint mostly intact, its December filing came on the heels of months of slumping sales.
Given these trends, if a version of Party City is revived, it will likely be an exercise in sentimentality more so than an economically sound business model.
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