Key bankruptcy opens up huge new product area for Walgreens | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Pharmacies have been struggling because fewer people need to pick up their prescriptions in person. In addition, some items that people used to buy from CVS, Walgreens, Rite-Aid, and other pharmacies can now be purchased more easily online.These chains were built around convenience. If you had to pick up a prescription, you could also buy related items, maybe treat yourself to some candy, and fill in other missing items.That model has faltered leading to massive closures in the space.

U.S, pharmacies by the numbers

Since 2010, nearly 30% of U.S. retail pharmacies (26,000 out of 89,000) that were open in 2010 had closed by 2021.
Walgreens: plans to close 1,200 stores over three years, with about 500 expected to shut in 2025.
CVS: announced they would close 900 pharmacy locations over a three-year span (starting around 2021).
Rite Aid: after filing for bankruptcy, has had well over 1,000 locations that have either closed or in process (liquidation, sales, etc.).

Source: Fox Business

To avoid more closures, CVS and Walgreens have to make changes. Walgreens has embraced that and plans to move into a market left open by the bankruptcy of a seemingly unrelated chain.

Party City closed all of its locations after a second Chapter 11 bankruptcy

Image source&colon; Shutterstock

Party City has left a void

Party City actually filed Chapter 11 bankruptcy twice. The chain, however, did not solve its problems with the actions taken during the first filing.

“While Party City previously pulled itself out of bankruptcy the first time around, its continued failure was likely inevitable. A downswing in demand for party products has continued to put pressure on the business. Much of this is down to two factors: increased competition and a more constrained consumer,” GlobalData Managing Director Neil Saunders told RetailWire.

The chain may not have been viable on its own, but it still sold hundreds of millions of party good each quarter. That wasn’t enough to save Party City, but it leaves a void in the marketplace.

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“Like many retailers, we’ve been operating in an immensely challenging environment with inflationary pressures on both costs and consumer spending, and while we did everything we could to navigate these headwinds, our very best efforts were ultimately not enough to overcome these challenges,” Party City wrote in a statement on its now defunct website.

The death of Party City

January 2023 :Party City (Holdco, Inc.) filed for Chapter 11 bankruptcy protection for the first time.
September 2023: The company emerged from that bankruptcy, having eliminated about $1 billion in debt.
December 21, 2024: Party City filed for Chapter 11 again (second time), this time announcing plans to liquidate and wind down its business.
700 stores : As part of the December 2024 Chapter 11 filing, the company announced going-out-of-business sales at approximately 700 U.S. stores.
Franchise stores: A number of stores independently owned (franchisees) were not included in the closure plan, so not all Party City branded stores completely shut.
Wind‐down period : The company expected the liquidation/closing of the roughly 700 stores to take place over about 10-12 weeks, ending in or around February 2025

Sources: Gillman Capone Law Group, CoStar

Walgreens steps into Party City’s void

Party City never fled a full 2023 earnings reports, but it was estimated by Bloomberg Law to have just over $2 billion in sales. Some of those sales likely went to Amazon while pop-ups like Spirit Halloween grab some seasonal sales, but that still leaves a large market for brick-and-mortar chain to go after.

Walgreens is stepping into that breach by adding a selection of party supplies.

“Whether celebrating a birthday, hosting a game day gathering or organizing a holiday hangout, Walgreens has all your party essentials covered,” said Walgreens Group Vice President Marty Esarte.

The pharmacy chain sees this as an expansion of how it already serves its customers

Here’s a selection of the new party merchandise Walgreens will be adding:

A wide range of foil balloons and helium included with purchase, so they’re party-ready – including popular characters and cartoon favorites, metallic numbers, stars, baby bottles, dinosaurs, mermaids, and more.
Shoppers will also find classic birthday candles, party plates and napkins, plus festive touches like an “It’s My Birthday” sash, cake toppers, banners, shimmering foil backdrops, and decorative centerpieces.
New items in the assortment start at $1.99.

“The party supplies market is projected to grow significantly over the next decade, with sustainability, customization, and digital retail channels playing crucial roles. Companies that can adapt to evolving consumer trends, offer eco-conscious alternatives, and leverage online platforms will remain ahead in the competition,” Founders Click shared in a report.