Party On! Bankruptcy for Party City May Not Be the End
The media is filled with stories these days of MULO (multi-location) retailers closing stores and doors and declaring bankruptcy. Our BUST series covered Bed Bath & Beyond, Jenny Craig, Christmas Tree Shops, and others. But before you start ringing the death knell on one more MULO brick-and-mortar retailer or restaurant, be aware that the party isn’t quite over. Party City is in the midst of a restructuring that could save the brand — just in time for the holiday season.
Cutting costs and raising enough money to keep inventory fresh is the key to survival. And Party City Holdco is exiting bankruptcy with less debt and a healthier balance sheet, according to a recent article in The Street.
Among the bold moves the retailer is making are store closings (about 50 of the 850 locations) and launching a store-within-a-store collaboration with grocery giant Winn-Dixie called Celebrations by Party City.
The demand for balloons, costumes, and other holiday and celebration accessories is certainly not waning and is expected to grow to almost $30B within the next ten years.
As long as consumers celebrate birthdays, holidays, and football season, the need for festive products will exist. But competing with online retailers has become tougher in this category, as it has with most consumer products. Last-minute shoppers are not enough to keep big box retail operators alive and thriving.
But clever and responsible moves like the ones that Party City is making might keep the lights on and our hands in the air and on our wallets in the years ahead.
Most retailers can’t make a comeback from bankruptcy, according to this industry source. Some, like Lord & Taylor, have switched to an online-only model to keep their brand alive and thriving.
Sharpening a (digital) pencil is simply not enough these days for survival. Clever moves like store-within-a-store, product line and service expansion (funds permitting), and in-store experiences can all be made before cash runs out.
The best advice for brick-and-mortar retailers these days is to think outside the big box and innovate before the balloon bursts.
Join StreetFight at Place 2023 as we host 2 sessions with more ideas for MULO brands.
