Party City has found a buyer for its intellectual property rights and wholesale assets as part of its second bankruptcy filing.
The Woodcliff Lake, New Jersey-based retailer, which sought Chapter 11 protection in December and is closing its stores, said it agreed to sell substantially all its IP and related wholesale operating intangible assets to New Amscan, an affiliate of Ad Populum. Ad Populum is a global seller of pop culture merchandise, as well as being in the costume industry. Its brands include the National Entertainment Collectibles Association, Wizkids, Kidrobot, Rubies Costumes and Graceland.
Party City's wholesale division, Amscan, has been a major supplier of party goods to retailers worldwide. The "pivotal agreement" with New Amscan and Ad Populum "marks a significant step toward ensuring continuity in the multibillion dollar party supply industry," according to Party City.
The sale is subject to higher or otherwise better offers and bankruptcy court approval. The deadline for other bids is Feb. 4 and the auction is slated for Feb. 6.
Party City was one of several dozen retailers to file for Chapter 11 last year and was one of the retailers that opted to liquidate and close all its stores. This was Party City's second bankruptcy in less than a year, with its previously fiing in January 2023. Many traditional retailers struggled as consumers cut back their spending on discretionary items, dealt with the aftershocks of the pandemic and faced higher costs of goods and transportation due to inflation and high interest rates.
Roughly 700 Party City store leases are in the process of being auctioned, with closings expected to be completed next month.
Regarding the deal to sell its IP and related wholesale operating assets to New Amscame, Party City Chief Financial Officer Dan Lamadrid in a statement said "this transaction offers a promising future for the Party City brand as we work to maximize value for the benefit of our stakeholders."
By combining Amscan's "strengths in sourcing and distribution with Party City's legacy, we are confident in our ability to innovate and grow in the party supply market, delivering products that inspire and elevate life's celebrations," Ad Populum CEO Joel Weinshanker said in a statement.
For the record
Paul, Weiss, Rifkind, Wharton & Garrison and Porter Hedges are serving as legal counsel. AlixPartners is serving as restructuring adviser. Hilco Streambank and Gordon Brothers Brands are collectively serving as intellectual property adviser. A&G Real Estate Partners is serving as real estate adviser, and Gordon Brothers is serving as store-closing consultant to the Party City. DLA Piper is serving as legal adviser to Ad Populum.