Party City emerges from bankruptcy protection
- Party City Holdco Inc. (PCHI) received approval to emerge from Chapter 11 bankruptcy protection.
- PCHI’s debt to be reduced by nearly $1 billion upon emergence.
- Party City’s store footprint, consisting of nearly 800 locations nationwide, also are set to remain open after negotiating improved lease terms and exiting less productive locations.
Party City Holdco Inc. (PCHI) received approval from the U.S. Bankruptcy Court for the Southern District of Texas of its Plan of Reorganization, paving the way for the retailer to emerge from Chapter 11 bankruptcy protection on stronger financial footing.
Under the plan, PCHI will exit with a substantially strengthened capital structure and improved liquidity, helping to ensure the retailer is best equipped to continue to execute on its strategy and further enhance its market leadership as the go-to destination for all things celebration. Specifically, the plan provides for PCHI’s debt to be reduced by nearly $1 billion upon emergence. Party City’s store footprint, consisting of nearly 800 locations nationwide, also are set to remain open after negotiating improved lease terms and exiting less productive locations during the Chapter 11 process, the retailer said.
"Today's plan approval is an important milestone in completing our financial restructuring and successfully positioning PCHI for the future," said Brad Weston, PCHI’s CEO, in a press release. "With our debt substantially reduced and Party City store portfolio optimized, we will emerge better positioned to advance our strategic priorities, continue to innovate and elevate the consumer experience, and pursue new growth opportunities. We thank our team members, retail and wholesale customers, suppliers and landlords for their support and collaboration during this process, and we are excited to build on PCHI's proud history as the leader in the celebrations space."
Under the terms of the approved plan, PCHI is expected to emerge with new shareholders, including the members of the ad hoc group of holders of the company's senior secured first lien notes who supported the restructuring. The plan provides for a new exit asset-based lending facility of $562 million and a fully backstopped $75 million new money investment to fund distributions and payment of administrative claims under the plan as well as the retailer’s operations upon emergence.
Woodcliff Lake, New Jersey-based PCHI’s offerings spanning more than 70 countries globally. PCHI is also the largest vertically integrated designer, manufacturer, distributor and retailer of party goods in North America. PCHI operates across multiple businesses within its retail division and consumer products division. On the retail side, Party City (Partycity.com) is the leading omnichannel retailer in the celebrations category, operating more than 800 company-owned stores, franchise stores and Halloween City (Halloweencity.com) seasonal pop-up stores. The consumer products division includes design and manufacturing entities Amscan, an industry leader in celebration décor, tableware, costumes and accessories, and Anagram, the global market leader in foil balloons.