Dive Brief:
- Party City Holdco is set to have a new owner following a bankruptcy auction. New Amscan, an affiliate of producer, manufacturer and distributor Ad Populum, is buying Party City’s IP and wholesale operations for $20 million, according to a Friday press release.
- New Amscan’s bid includes related Amscan operating assets. Amscan is a wholesale maker and supplier of balloons, costumes and other party products. New Amscan was named the stalking horse bidder last month.
- Court documents show Michaels is the backup bidder for Party City’s IP. The auction is subject to a bankruptcy court judge’s approval, which is tentatively set for Feb. 26.
Dive Insight:
Party City announced going-out-of-business sales at all stores in late December after filing for its second bankruptcy in two years. In January, A&G Real Estate Partners said it would begin auctioning nearly 700 store leases in 45 states, starting in early February. New Amscan was named the stalking horse bidder last month.
Party City said Friday the lease auction process generated about $14.5 million in gross proceeds and efforts to monetize remaining leases are ongoing. Dollar Tree and Five Below emerged as top bidders for Party City’s store leases, court documents show. Westernwear retailer Cavender’s, Rack Room Shoes, Books-A-Million, Barnes & Noble, Burlington, party store Zurchers, and La-Z-Boy also bid on leases, as did several of Party City’s landlords.
Dollar Tree bid on nearly 150 leases, while Five Below bid on about 40 leases, according to documents filed Saturday with the U.S. Bankruptcy Court for the Southern District of Texas. A judge is set to approve those transactions later this month.
Ad Populum, which boasts the parent company of the Chia Pet and The Clapper as part of its brand portfolio, said it plans to transform the Party City and Amscan brands, using their sourcing and distribution to build upon Party City’s legacy in the party supply industry. The company did not immediately respond to an emailed request for comment from Retail Dive.
The pending sale to New Amscan is the latest turn in what’s become a bumpy road for Party City. Competition from other specialty stores like Spirit Halloween and improved merchandise offerings from larger retailers, including Amazon and Target, contributed to Party City’s problems, Neil Saunders, managing director of GlobalData, told Retail Dive in December.
In the first bankruptcy, filed in January 2023, the company struck a deal with a bondholder group for a $150 million debtor-in-possession loan. Party City exited bankruptcy in October of that year, eliminating nearly $1 billion in debt and naming a new CEO.
But the company filed for bankruptcy again in December. Party City said in court filings it had $400 million in debt and was unable to overcome several challenges, including inflation and reduced discretionary spending.