Party City Holdco Inc. is preparing to file for bankruptcy within weeks after the party-favor retailer’s cash dwindled and inflation dampened sales, WSJ Pro Bankruptcy reported. The company has engaged AlixPartners LLP as a restructuring adviser, the people said. Party City is also in discussions with its bondholders to convert debt into equity to trim the balance sheet. Representatives for Party City and AlixPartners didn’t immediately respond to requests seeking comment. The company is also planning to close some stores. Party City has been suffering from widening net losses, and its recent Halloween sales came in at the low end of expectations in part because inflationary pressures have hampered customers’ willingness to spend, the company said last month. Party City also has engaged law firm Paul Weiss Rifkind Wharton & Garrison LLP as restructuring counsel. Bondholders have been working with law firm Davis Polk & Wardwell LLP as well as financial adviser Lazard Ltd.
