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Party City

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Party City Holdco Inc.
Company typePrivate
Industry
  • Retail
  • Manufacturing
  • Distribution
Founded1986; 38 years ago (1986); in East Hanover Township, New Jersey, U.S.
FounderSteve Mandell
FateBankruptcy and liquidation
Headquarters
Woodcliff Lake, New Jersey (defunct)
,
United States
Number of locations
750+[1] (2015)
Area served
Worldwide
Key people
  • Barry Litwin (CEO)
  • Todd Vogensen(CFO)
ProductsParty supplies, Halloween costumes
Brands
  • Party City
  • Halloween City
  • Toy City
ServicesFranchising
RevenueIncrease$2.27 billion[1] (2014)
Increase$81.3 million[1] (2014)
Increase$56.1 million[1] (2014)
Total assetsIncrease$3.38 billion[1] (2014)
Total equityIncrease$487 million[1] (2014)
Number of employees
10,000+ (before closure)
ParentCanadian Tire (Canada only; 2019–present)
DivisionsRetail
Consumer Products Group
Websitepartycity.com
partycity.ca
partycity.com.mx

Party City Holdco Inc.[2] is an American chain of party stores founded in 1986 by Steve Mandell in East Hanover, New Jersey. The company's headquarters are in Woodcliff Lake, New Jersey.[3]

The company is the largest retailer of party goods in Canada, Puerto Rico, and Mexico. The company operates over 850[4] company-owned and franchise outlets in over 70 countries around the world under the Party City, Halloween City, Toy City, Factory Card and Party Outlet brands.[citation needed]

In December 2024, Party City filed for Chapter 11 bankruptcy,[5] laid off all administrative employees,[6] and announced they would liquidate and close most remaining stores in the United States.[7] Stores not operated by Party City Holdco, such as those in Canada, Puerto Rico, and Hawaii, are unaffected and will continue to operate.

History

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1986–1993: founding and franchising

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Facade of a Party City store in The Woodlands, Texas

Party City was founded by Steve Mandell in 1986. Mandell recognized that the market for party goods was highly fragmented with a lot of small mom-and-pop operations and noticed that a large number of retailers carried limited supplies. Additionally, he saw that many big players were trying to dominate the party goods market.

After scraping together $125,000, Mandell opened a 4,000 square feet (370 m2) store in East Hanover, New Jersey, naming it Party City. The operation was immediately successful and within a year Mandell began planning for a second location. He also began to hear from people asking to franchise the Party City concept, and as a result the company began its evolution into a national chain.

After his first year in business Mandell also decided to concentrate on Halloween. In 1987, over a quarter of his store was turned into a "Halloween Costume Warehouse". The move proved highly successful and led to the company's ongoing focus on the holiday, and the major impact that the month of October would have on the company's bottom line. Year-round, the company stocked an inventory of Halloween costumes, if for no other reason than to make customers aware of the items for the next Halloween season.[8] One quarter ($560 million) of the company's 2015 revenue came from Halloween; the company operates about 300 Halloween City pop-up stores.[9]

Party City started franchising stores in 1989, with the first franchise store located in Hazlet, New Jersey.[10] By 1990, Mandell also owned four Party City stores. At this point he incorporated the business as a franchising operation, with his stores forming the core of the chain. By the end of 1990, Party City outlets numbered 11; five more franchised stores were added in 1991, 16 in 1992, and another 26 in 1993, bringing the total to 58. Party City was now a nationwide chain with store locations ranging from Hawaii to Puerto Rico. The company's annual revenues in 1993 topped $2.4 million and net profits approached $235,000.

During these first four years of operation, Mandell refined the Party City concept, including store design, product mix, choice of suppliers, and the implementation of systems. In late 1993, with a successful store model in hand, Mandell decided to de-emphasize franchising in favor of opening company-owned stores, which would generate greater returns for the corporation than it could receive on fees and royalties from franchised outlets, as well as allow Mandell to better control the destiny of Party City. While franchisees might maintain a tighter control on inventory, Mandell was insistent that company-owned units would be amply stocked with a wide range of merchandise.[8][10]

2005–2022: acquisitions and developments

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Party City in Markham, Ontario, Canada
Party City in Rockaway, New Jersey

In 2005, the company was sold to a subsidiary of AAH Holdings Corporation, owner of Amscan, a designer, manufacturer and distributor of party goods in America.[11] Amscan then went on to acquire the party retailers Party America in 2006 and Factory Card & Party Outlet in 2007. Both retail chains began to operate under the Party City network, thereby making Party City the largest party supplies retailer in the United States.[12]

With Amscan's 2011 acquisition of American Greetings' Designware party division, Party City added licensing agreements with Nickelodeon, Sesame Workshop, and Hasbro.[13] In 2011, Amscan became a licensee for MLB, NBA, NFL, NHL, and NCAA party products and balloons, with Party City carrying all teams in their respective markets and offering the entire assortment in larger stores and online.[14]

In 2011, Party City expanded outside the United States with the acquisition of the Canadian retailer Party Packagers, making Party City the largest party goods retailer in North America.[citation needed] In 2012, these stores began to re-brand as Party City.[citation needed] In 2013, Party City bought iParty.[15] In December 2017, Party City acquired MG Novelty Corporation for about $5.5 million; that company operated seven retail stores under the name Party Galaxy in the Oklahoma City metropolitan area.[16] In 2017, Party City purchased its franchised locations in the Carolinas.[17]

In 2012, Advent International, Berkshire Partners LLC and Weston Presidio a majority stake in Party City to Thomas H. Lee Partners. In 2015, Party City Holdco Inc went public with Thomas H. Lee Partners retaining 55% and Advent International owning 19 percent. In April 2017, the company was approached by a private equity firm to acquire the company. In response the company placed itself on the market.[17]

Party City store in Fresno, California

In June 2018, Party City announced that it would open around 50 Toy City pop-up stores beginning in September 2018, alongside its Halloween City stores. The stores operated through the conclusion of the holiday season, and were meant to capitalize upon the closure of the U.S. locations of Toys "R" Us. Some of its locations used vacancies created by the Toys "R" Us shutdown.[18][19][20]

In May 2019, the chain announced that it would close 45 locations "to help optimize our market-level performance, focus on the most profitable locations, and improve the overall health of our store portfolio".[21]

In August 2019, Party City's Canadian operations were acquired by Canadian Tire for $174.4 million CAD.[22]

2023–present: bankruptcy and liquidation

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A Party City store in Attleboro, Massachusetts.

On January 17, 2023, Party City Holdco Inc. filed for Chapter 11 bankruptcy, weighed down by a confluence of factors including the pandemic and changing consumer behavior.[23][24] The move was part of an attempt to restructure and reduce the company's debt. The company secured $150 million in financing to allow it to keep its stores open and operations running. The company said that the move would help it complete an "expedited restructuring" to reduce its debt, which should be done by the second quarter of 2023.

On September 6, 2023, Party City officially announced they had completed their bankruptcy reorganization after a US judge approved their bankruptcy plans. Party City was able to eliminate over $1 billion of debt during the reorganization. The majority of its stores were expected to stay open until 2025, however a handful of its 800 stores had permanently shuttered by the end of 2023, particularly underperforming and less productive locations, and stores that were located in underdeveloped and obsolete areas.[25]

In December 2024, Party City warned that it would be preparing to file for bankruptcy for the second time in two years as it was running out of cash to continue operating at several of its locations. The company announced that it would close all of its US stores by February 28, 2025, as part of a winding-down procedure. US stores not operated by Party City Holdco will remain open;[26][27] Canadian stores will continue to operate as they are owned by Canadian Tire.[28]

See also

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References

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  1. ^ a b c d e f "FORM S-1/A (Securities Registration Statement)" (PDF). Party City Investor Relations. Party City Holdco Inc. 10 April 2015. pp. 19–20. Retrieved 17 April 2015.
  2. ^ "Party City Holdings Inc - Company Profile and News". Bloomberg.com. Retrieved 2023-12-29.
  3. ^ Redmond, Kimberly (2022-10-07). "Party City celebrates opening of new Woodcliff Lake HQ (updated)". NJBIZ. Retrieved 2023-12-29.
  4. ^ City, Party. "Online Party Store with over 850 Store Locations". Party City. Retrieved 2023-12-29.
  5. ^ Ma, Dorothy (December 21, 2024). "Party City Files for Bankruptcy a 2nd Time in Retail Déjà Vu". Bloomberg. Retrieved December 21, 2024.
  6. ^ "Party City files for bankruptcy, a day after announcing mass layoffs at its headquarters - CBS News". www.cbsnews.com. 2024-12-21. Retrieved 2024-12-22.
  7. ^ Murphy, Aislinn (2024-12-20). "Party City going out of business after 40 years". FOXBusiness. Retrieved 2024-12-20.
  8. ^ a b "Party City Corporation History". Funding Universe. Retrieved 17 April 2015.
  9. ^ Clark, Patrick; Mosendz, Polly (2016-10-27). "How Halloween Stores Conquered America". Bloomberg. Retrieved 2019-02-13.
  10. ^ a b "Party City Holdings Inc. Press Kit" (PDF). Party City. January 2015. Archived from the original (PDF) on 20 March 2015. Retrieved 17 April 2015.
  11. ^ "Acquisition of Party City Corporation by AAH Holdings Completed". Press Releases. Amscan Holdings. Archived from the original on 17 April 2015. Retrieved 17 April 2015.
  12. ^ "Party America, a Leading Party Goods Retailer, Acquired by AAH Holdings Corporation". Press Releases. Amscan Holdings. Archived from the original on 17 April 2015. Retrieved 17 April 2015.
  13. ^ "Amscan Announces Strategic Alliance With American Greetings". Press Releases. Amscan Holdings. Archived from the original on 26 September 2015. Retrieved 17 April 2015.
  14. ^ Lefton, Terry (3 June 2012). "Party time". Street & Smith's Sports Business Journal. American City Business Journals. Retrieved 17 April 2015.
  15. ^ "iParty agrees to be acquired by Party City". Boston.com. 2013-03-01. Retrieved 2019-01-27.
  16. ^ "Party City Acquires Party Galaxy". www.businesswire.com. 2017-12-19. Retrieved 2019-01-27.
  17. ^ a b Hirsch, Lauren (April 27, 2017). "U.S. retailer Party City explores sale -sources". Reuters. Retrieved July 18, 2019.
  18. ^ "Toy City pop-up stores will fill former Toys R Us, Babies R Us locations". NJ.com. 6 September 2018. Retrieved 2018-12-22.
  19. ^ "Party City joins the list of retailers feasting on Toys 'R' Us remains". Fortune. Retrieved 2018-07-13.
  20. ^ Thomas, Lauren (25 June 2018). "Party City to open Toy City stores in wake of Toys R Us' demise". CNBC. Retrieved 26 June 2018.
  21. ^ "Party City CEO Says Closure of 45 Stores Is 'Completely Unrelated' to Helium Shortage". People.com. Retrieved 2019-05-11.
  22. ^ Rodriguez, Jeremiah (2019-08-08). "Canadian Tire buys up Party City for $174.4 million". CTV News. Retrieved 2019-08-08.
  23. ^ Jodi Xu Klein, Soma Biswas and Alexander Gladstone (6 January 2023). "Party City Plans Bankruptcy Filing Within Weeks". Walt Street Journal. Retrieved 17 January 2023.
  24. ^ "Party City files for bankruptcy after pandemic recovery falters". Bloomberg. 2023-01-17. Retrieved 2023-01-18.
  25. ^ "The majority of Party City stores will stay open as it exits bankruptcy". CNN. September 7, 2023. Retrieved September 9, 2023.
  26. ^ Lopez, Lucy (December 20, 2024). "Hawaii Party City stores to remain open despite national closures". KHON-TV. Retrieved December 26, 2024.
  27. ^ Saavedra, Ninfa (December 23, 2024). "'We are excited to continue the party': These 2 Houston-area Party City's will stay open despite corporate shutdown". KPRC-TV. Retrieved December 26, 2024.
  28. ^ Abbassi, Emmy; Valinsky, Jordan (December 20, 2024). "Party City is going out of business". CNN. Retrieved December 20, 2024.
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Wikimedia Commons has media related to Party City.
  • Official US website
  • Official Canadian website
  • Official Mexican Website
  • Business data for Party City Holdco Inc.:
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