Party City filed for Chapter 11 bankruptcy protection on Tuesday, becoming the latest casualty in the US retail industry as stubbornly high inflation hurts consumer spending.

Struggling retailers often seek bankruptcy protection after the holiday season to take advantage of the cash cushion provided by recent sales.

Bed Bath & Beyond raised questions about its ability to continue as a going concern earlier this month.

Woodcliff Lake, New Jersey-based Party City said it had reached a pre-negotiated agreement with a group of bondholders to support an «accelerated restructuring» that is expected to be completed in the second quarter.

It reported $1 billion to $10 billion of estimated assets and liabilities, and said it had secured $150 million in debtor-in-possession financing to support its operations.

The party supplies retailer’s fortunes have dipped since the Covid-19 pandemic as it struggled with slowing sales due to store closures, coupled with tight inventory and limited helium supplies due to the global supply chain disruptions.

The company, which operates more than 800 owned and franchised stores across North America, also battled higher costs for freight, labor and raw materials as it pushed forward shipping deadlines to ensure enough products on its shelves.

Its subsidiaries outside the United States, its franchise stores and its Anagram business were not part of the bankruptcy proceedings, the company said, adding that its stores would remain open.

Shares of the party supply company rose about 11% to 41 cents before pausing before trading on Wednesday. The stock fell as much as 57% on Jan. 6 after the Wall Street Journal. reported that the company could declare bankruptcy in a matter of weeks.