Party City IP and Wholesale Operations Acquired for $20M
Bankrupt specialty retailer Party City has found a buyer, reports NJBiz.com. During a Feb. 6 auction, party goods supplier New Amscan PC LLC emerged as the tentative winner for most of Party City’s intellectual property (IP) and related wholesale operating intangible assets, as well as “a significant portion” of the brand’s real estate lease portfolio. The chain did not specify how many of its nearly 700 stores the transaction includes. The party goods retailer said Friday the lease auction process generated about $14.5 million in gross proceeds and efforts to monetize remaining leases are ongoing.
New Amscan is an affiliate of Ad Populum, a Santa Monica, Calif.-headquartered designer and wholesaler of gifts, home accents, costumes and collectibles. According to Party City Holdco Inc. (PCHI), New Amscan’s prevailing bid of $20 million comprises $16 million in cash and additional consideration. Party City noted the total represents twice the value of the stalking horse bid and followed “robust bidding.” 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.
Total Retail's Take: Although Party City was unable to rightsize its business and subsequently filed its second bankruptcy in two years, several interested parties bid on the chance to reinvigorate the brand. “As previously announced, Ad Populum intends to lead a transformation of the Party City and Amscan brands, leveraging its strengths in sourcing and distribution to preserve and build upon PCHI’s legacy in the multibillion-dollar party supply industry,” Party City said in a press release.
Party City announced going-out-of-business sales at all stores in late December after filing for its second bankruptcy in two years. Increased competition from other specialty stores such as Spirit Halloween and improved merchandise offerings from larger retailers, including Amazon.com and Target, contributed to Party City’s challenges. It seems the iconic party goods brand may be receiving another chance to return to its former success under new ownership.
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
