Discount chain Dollar Tree, which already picked up some closed 99 Cents Only Stores, and value retailer Five Below are leading the bids for hundreds of Party City stores closed amid bankruptcy.
Dollar Tree Inc. could be adding a southeast Santa Rosa store, and Five Below may be expanding into Marin County.
The discount chain and the teen-oriented value retailer have emerged as the top two bidders in bankruptcy court considering the 695 Party City stores closing nationwide as the four-decade-old special-occasions retailer goes out of business, documents show.
Here are the winning bidders for local stores:
— Dollar Tree: 2675 Santa Rosa Ave., Santa Rosa, 10,308 square feet
— Five Below: 580 Francisco Blvd. N., San Rafael, 9,970 square feet
The 18,347-square-foot Fairfield store at 1574 Gateway Blvd. was listed among the locations that didn’t get any bids at the auction Feb. 6, according to a court filing. A&G Real Estate Partners, which was hired by Party City Holdco Inc. to sell all the leases, continues to market these locations.
Party City filed for Chapter 11 reorganization in December 2024, the retailer’s second such filing in two years. In the 2023 effort, the company reduced its debt by about $1 billion and emerged from court protection that October.
A court hearing to consider the winning bids in the latest Party City action is set for Feb. 26 in Houston.
Bids came in for designation rights for leases at 251 locations, but 446 sites didn’t get bids by the auction, according to Retail Specialists. Dollar Tree has successfully bid on 148 locations, and Five Below, 44.
Bankruptcy law allows a debtor business to assume (pay what’s owed and keep) or reject (terminate) real estate leases or contacts. Assumed leases can be sold to third parties as designation rights. Bidders can be companies that will resell the rights, or tenants themselves can vie for them.
Tenants like these rights because they allow for selectively taking over, rejecting or selling off leases. Attorneys advise property owners to make sure their lease contracts retain protections allowed by statute and case law.
Virginia-based Dollar Tree currently has 34 stores in all six North Bay counties. Those include three former 99 Cents Only Stores whose leases were among 170 former 99 Cents Only Stores locations in Arizona, California, Nevada and Texas for which Dollar Tree acquired designation rights in May 2024 during 99 Cents’ bankruptcy.
Philadelphia-based Five Below has two North Bay locations, both in Petaluma, at Washington Square and Redwood Gateway shopping centers.
Jeff Quackenbush covers wine, construction and real estate. Reach him at [email protected] or 707-521-4256.
