(Corrects company headquarters in paragraph 4 to Woodcliff Lake, not Rockaway; the error appeared in a previous version of the story as well)
(Reuters) -Party City Holdco Inc filed for Chapter 11 bankruptcy protection on Tuesday, becoming the latest casualty among U.S. retailers in the aftermath of the pandemic, as it struggled with low demand and increased competition from online buying.
Troubled retailers often seek bankruptcy protection after the holiday season to take advantage of any cash infusion provided by recent sales.
Bed Bath & Beyond Inc raised doubts about its ability to continue as a going concern earlier this month.
Woodcliff Lake, New Jersey-based Party City said it had reached a pre-negotiated agreement with a bondholder group to support an “expedited restructuring,” which it expected to complete in the second quarter of this year.
It reported $1 billion to $10 billion of both estimated assets and liabilities, and said it had obtained $150 million in debtor-in-possession financing to support its operations.
The party supplies retailer’s fortunes have dwindled since the COVID-19 pandemic as it wrestled with slowing sales due to lockdowns and store closures, along with inventory shortages and tight helium supplies due to global supply chain disruptions.
The company also battled higher freight, labor and raw materials costs as it pulled forward shipping timelines to ensure enough products on its shelves.
Its subsidiaries outside of the U.S., its franchise stores, and its Anagram business were not part of the bankruptcy proceedings, the company said, adding that its stores would continue to remain open.
(Reporting by Granth Vanaik and Jyoti Narayan in Bengaluru; Editing by Maju Samuel and Nivedita Bhattacharjee)