By Mrinmay Dey

(Reuters) – Party City, which has struggled since the COVID-19 pandemic, filed for Chapter 11 bankruptcy protection in the United States on Saturday for the second time in two years as it plans to close its retail and wholesale operations to set.

The retailer, which has been in business for more than 40 years and sells party items from themed decorations to Christmas costumes, said all of its 700 stores in the country would remain open as it begins sales.

The Company and certain of its subsidiaries have filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. In a filing with the court, Party City Holdco listed both assets and liabilities ranging from $1 billion to $10 billion and is estimated to have more than 10,000 creditors.

Party City Holdco’s lead lenders would provide the retailer with the necessary financial support to fund operations during the resolution process, the Woodcliff Lake, New Jersey-based company said in a statement.

Struggling retailers often seek bankruptcy protection during the holiday season to take advantage of the cash infusion offered by recent sales.

Party City, which operates both brick-and-mortar stores and an e-commerce site, said it would retain most of its 12,000 employees during the sale period to support the fulfillment process.

In January last year, the company filed for Chapter 11 bankruptcy protection in the US for the first time. Later that year, a plan to exit bankruptcy was agreed upon, which included canceling around $1 billion of the company’s debt.

The company has suffered from lockdowns and store closures since the pandemic, as well as warehouse shortages and low helium supplies due to disruptions in the global supply chain.

Amscan, a designer, manufacturer and distributor of party supplies operated by Party City Holdco, also filed for bankruptcy on Saturday.

(Reporting by Mrinmay Dey in Bengaluru; Editing by Frances Kerry)