By Ed Avis
Party City filed for bankruptcy in December for the second time in two years, leading to the closure of most of its stores across the country. But now Ad Populum, the owner of Rubies, Smiffy's and other cultural product companies, has entered into a "stalking horse agreement" to buy the intellectual property and wholesale operating intangible assets of the company.
A stalking horse agreement is a bid to buy a bankrupt company's assets before a planned auction, which essentially sets a floor on the price of the company. The auction for these assets will be February 6, so another buyer could emerge. Ad Populum created an affiiliate called New Amscan PC, LLC to receive these assets. The name presumably was chosen because Amscan was Party City's wholesale division.
The big unanswered question is: What will Ad Populum do with these assets? We emailed the public relations office noted in the press release about this transaction, but had not received a reply before we published this article. We will update the article if we hear from them.
It seems unlikely that the Party City stores would suddenly spring back to life, since they have all been holding fire sales since the bankruptcy was announced. And the leases were put on the market, so even if a new owner wanted to reopen the stores, real estate would have to be secured.
The press release did offer some clues. It contains a quote from Joel Weinshanker, Ad Populum's CEO, who says, "We are excited to lead the transformation of the Party City and Amscan brands. By combining our strengths in sourcing and distribution with Party City's legacy, we are confident in our ability to innovate and grow in the party supply market, delivering products that inspire and elevate life's celebrations."
And one of the advisors to the sale, Robert Himmel from Gordon Brothers, is quoted as saying, "Through this transaction, Ad Populum will be well positioned to reimagine the Amscan wholesale distribution platform, creating a pathway for long-term success in a vital market segment in the party supply industry."
Both of these quotes, plus the chosen name of the new affiliate -- New Amscan PC -- seem to imply that Ad Populum's hope is to revive Amscan, the distributor. Stay tuned as this story develops.