NEW YORK — Occasion Metropolis has filed for Chapter 11 chapter safety after scuffling with rising costs and a pullback in buyer spending.
The corporate, based mostly in Woodcliff Lake, New Jersey, stated that its franchise shops, subsidiaries exterior of the U.S. and its foil balloons Anagram enterprise usually are not a part of the restructuring and can stay core parts of its enterprise.
Occasion Metropolis Holdco Inc., stated its greater than 800 company-owned and franchise shops all through North America will stay open, and prospects can nonetheless store on the corporate web site.
The chain is planning an expedited restructuring that it stated would considerably decrease its debt and release money.
The corporate has secured a dedication from the Advert Hoc Group for $150 million in debtor-in-possession financing. It stated the financing, which is topic to courtroom approval, would supply ample money to proceed operations.
Shares rose greater than 10% earlier than the market opened Wednesday.
Occasion Metropolis for years has confronted rising competitors from Walmart and Goal and more and more from occasion-based pop-up shops equivalent to Spirt Halloween. That strain has intensified in an period of rising costs, together with for helium utilized in occasion balloons, and slowing client demand.
“Occasion Metropolis was once the most effective video games on the town, however it's now one thing of an also-ran operation,” stated Neil Saunders, managing director of GlobalData Retail. “There's seemingly nonetheless one thing of a task for Occasion Metropolis, however the firm must financially restructure and to rethink its method.”
Saunders believes Occasion Metropolis ought to take into consideration the way it reaches prospects together with taking a look at extra engaging places for its shops and beefing up its e-commerce website.
In November, Occasion Metropolis reported its quarterly losses widened, reflecting a 3.2% drop in comparable retailer gross sales. Total gross sales have been inside expectations, however on the decrease finish.
In December, the Securities and Trade Fee warned Occasion Metropolis that it was in danger for being delisted by the New York Inventory Trade for failing to keep up a mean $1 per share inventory value over a 30-day interval.
Shares are presently hovering round 40 cents. The corporate went public in April 2015 at $17 a share, and traded as excessive as $22.60.
Occasion Metropolis expects the corporate restructuring to be accomplished within the second quarter.