A massive retailer has now survived Chapter 11 bankruptcy after the pandemic negatively impacted the business for over a year.
Party City has officially emerged from total bankruptcy after eliminating nearly $1 billion in debt and enhancing its liquidity.
“The covid pandemic put Party City in a difficult place.
People weren’t having parties, so the chain basically sold merchandise that wasn’t essential, or even relevant, to anyone.
That created a situation where the company, which was already struggling, burned through a lot of its cash reserves simply to survive.
And even when pandemic lockdowns ended, there was no major comeback for the chain.
People went back to having parties, but they did not go back to celebrate the events they missed,” reports TheStreet.
“Party City lost more than a year of birthdays, holidays, graduations and other celebrations, which forced the company into Chapter 11.
That process enabled the company to make needed changes to emerge and get back to its pre-pandemic business.”
In a press release, Party City said that it has completed its restructuring and emerged from Chapter 11 bankruptcy financially stronger and “well-positioned” for the future.
“Through its restructuring, PCHI has substantially strengthened its capital structure by eliminating nearly $1 billion in debt, enhanced its liquidity, and optimized its Party City store portfolio by having negotiated improved lease terms and exited less productive stores.
The company will move forward with nearly 800 Party City locations nationwide,” PCHI wrote.
Party City Chief Executive Brad Weston said he plans to step down as of Nov. 3 and will be succeeded on an interim basis by the chain’s president, Sean Thompson.
The company has emerged from bankruptcy with a new asset-based-loan facility of $562 million and $75 million in new investment to fund its ongoing operations, per reports.
A Popular Retailer Is Now Closing Its Doors
A popular retailer is now closing its doors as it ceases operations in Pennsylvania amidst bankruptcy concerns.
“Struggling pharmacy chain Rite Aid is set to close three more of its locations in Pennsylvania.
Rite Aid was founded in Pennsylvania in 1965 and is headquartered in Philadelphia.
They are preparing to file for bankruptcy after incurring $ 3.3 billion in unpaid debt,” reports Ash Jurberg.
Several big retailers have begun to shutter, and many states experiencing an increase in layoffs.
WSJ says, “The drugstore chain is preparing a chapter 11 filing within weeks.”
Rite Aid operates over 2,330 stores in 17 U.S. states, but this number is declining. The chain recently closed a raft of stores – 145 closed in 2022, and 25 have closed this year.
The following three Rite Aid locations will close in Pennsylvania this month:
- The Rite Aid in the Lehigh Shopping Center in Bethlehem is closing on Tuesday, October 17. Items are between 50% and 75% off.
- The Moon Township Rite Aid will close on October 25, and the store will offer up to 75% of goods to clear stock.
- The Rochester Rite Aid at 351 Brighton Ave. will close on October 18 and has select merchandise up to 75% off.
“Aging baby boomers have been a significant tailwind for the company’s retail pharmacy sales; however, Rite Aid’s front-end sales are slowing because of competition and theft,” reports TheStreet.
“Non-pharmacy same-store sales open at least one year slipped 4.4% year over year in the second quarter, even as the company reported a $9 million increase in retail store shrink, the industry term for losses due to theft and unaccounted inventory.
Rite Aid is also suffering because rising interest rates have caused variable interest on its debt to balloon.
Also Read: A US Company Now Declares An Unexpected Bankruptcy
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