Alexa, play “When the Party’s Over”... Halloween icon Party City has filed for bankruptcy. As America’s largest party retailer with 850 stores, PC is a go-to for themed birthdays and last-minute costumes. But the festive chain has racked up $1.7B+ in debt, as everything from higher costs to helium shortages hit its bottom line. It’s lost money for the past three fiscal years, and said it was on track to lose nearly $200M this year. Now:
Spooky szn… Party City is only the latest retail casualty, as historically high inflation and rising interest rates scare off consumers. This month, debt-laden Bed Bath & Beyond said it could also file for Chapter 11 as losses pile up. Meanwhile, US retail sales continued to fall last month, posting their biggest monthly drop since 2021 as shoppers cut back on holiday splurges.
Being a retailer is hard… but being a seasonal retailer is even harder. Online shopping is already crushing brick-and-mortar stores. Seasonal businesses that rely on a few holidays for most of their sales have it even tougher. As Americans spend more on essentials like groceries and rent, there’s less cash for balloons and Wednesday Addams wigs. Retailers without regular cash flow could find it even harder to keep the lights on.