Party City Holdco Inc. doesn't have much reason to celebrate as it reportedly prepares for a bankruptcy filing that could turn ownership over to its creditors.

Citing sources that asked not to be identified, Bloomberg reported the company will likely miss a coupon payment next month and may ask its creditors to negotiate a restructuring.

Business has been tough for the party goods retailer since 2019 when a helium shortage led it to close 45 of its 870 stores. Along with the continued helium shortage, Party City is also facing increased shipping costs and decreased demand amid high inflation. Sales during the Halloween season last year disappointed investors, Bloomberg reported.

Party City has hired AlixPartners as a restructuring adviser, the Wall Street Journal reported.

The company had about $92M in cash available in Q3 compared to almost $1.8B of debt, which S&P Global Ratings classifies as unsustainable. The debt burden includes a small slug of senior notes maturing in August, Bloomberg reported in December, along with the news Party City had hired Moelis & Co., AlixPartners and Paul Weiss Rifkind Wharton & Garrison for advice.

A creditor group, including Capital Group Cos. and Silver Point Capital, is discussing restructuring ahead of the potential filing, Bloomberg reported, adding the firms have significant first-lien debt holdings and could be well-positioned to take control of the retailer.

A debtholder group tied to Party City’s balloon-manufacturing subsidiary Anagram told Bloomberg that it hasn't yet taken part in confidential negotiations, but the creditors believe their collateral puts them in a good position for healthy recoveries in a restructuring.

Party City shares were trading at about 27 cents Monday morning, down from $6.60 a year ago.