Party City Is In Big Trouble
Party City faces the risk of being removed from the New York Stock Exchange in the next six months if it cannot get its price per share to consistently stay at $1.00 or higher.
Party City has found itself in quite a predicament. The party supply giant could lose its public trading status on the New York Stock Exchange. This means that Party City would effectively be ousted from Wall Street.
Party City finds itself at risk of being removed from the New York Stock Exchange (NYSE) after its share price failed to close at a price of at least $1.00 over the course of a month, per information from Retail Dive. The company will reportedly have a period of six months to turn things around before actually being eradicated from the NYSE. This news comes alongside a period of immense difficulty for the well-known party supply business.
Party City, unfortunately, really is in a downward spiral. Data from the New York Stock Exchange shows that the party supplier’s price per share dipped by more than $6.00 over the period of a year. In January 2022, Party City’s share price was hovering at approximately $6.55. At the time of publishing, its stock is trading for a measly 38 cents per share.
Party City’s troubles at the NYSE are symptomatic of the larger hardships plaguing the company. In recent weeks, Party City reached out to its legal counsel to discuss liquidation and restructuring options. This suggests that either the company is preparing to do something drastic like filing for bankruptcy, or they are taking aggressive steps to cut costs wherever possible in order to avoid that outcome – with the latter being the most probable.
Like many other retailers, Party City has been facing challenges related to inflation and overarching supply chain issues. For example, Retail Dive Cited that the party supply giant has been having trouble procuring helium to fill balloons. And even in times when they had been able to secure helium supply, the higher costs have been difficult for the company to satisfy.
Right now, Party City has figured out that it needs to do everything it can to safeguard and recoup whatever capital possible so that the business can have a fighting chance of staying afloat in 2023. Unfortunately, though, as part of its aggressive maneuvers to accomplish this, many Party City employees will lose their jobs. Currently, the company is planning to lay off nearly 20% of its total workforce.
Furthermore, Party City’s woes are reflective of a larger trend characterizing the retail sector at present. Right now, there exists a significant disparity between companies that are doing well and companies that aren’t. There is very little middle ground.
The reasons for this are complex and multi-faceted. But the overarching cause has largely to do with a retailer’s ability to recognize and adapt to consumer preferences. Hence, it stands to reason that if Party City knows how or is capable of learning how to do that, then the company has a shot at surviving in the years ahead.
Party City is in a world of hurt, but its fate is not yet sealed. In the coming months, it will be interesting to see if the company’s efforts give the retailer a new lease on life or if they culminate in being all for naught.
