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Canadian Tire has announced that it has reached a deal to purchase Party City Canada for $174.4 million. A press release said the iconic Canadian retailer's addition of the party supply company makes it a one-stop destination as ‘Canada's Fun Store.”

After buying up the Canadian subsidiary of the troubled party supply company, Canadian Tire will soon beginning selling Party City’s “unique product assortments” online and in its existing 500 retail stores across the country, as part of a ten-year wholesale agreement.

"Strengthening our marketplace is at the heart of our growth strategy and we are excited to welcome Party City into the Canadian Tire family of companies," CTC executive vice-president Allan MacDonald said in a statement.

The Toronto-based company is hoping the purchase will help build its own connection with millennial customers. Canadian Tire also runs several retail banners including SportChek, Mark's and Helly Hansen.

The Party City chain, with its 65 Canadian retail stores in seven provinces focusing on “seasonal and micro-seasonal celebrations,” will also be added to Canadian Tire’s Triangle Rewards program.

MacDonald added "we believe the Party City-Canadian Tire partnership will drive more trips, improve our offers in micro seasons, strengthen our connection with millennials and Canadian families and expand the appeal of Triangle Rewards."

Canadian Tire also said it will be investing in Party City stores. It predicts that it will “double Party City's Canadian retail sales to $280 million by 2021.”

Party City Holdco Inc. says it will use some of the sale proceeds to pay down its debt.

In May, Party City’ CEO James Harrison said that 45 locations in the U.S. would be shuttering, which he said “completely unrelated to the global helium issue.” Its stock has fallen about 60 per cent in the past 12 months.

No Canadian stores had been expected to close this year.

Canadian Tire also released its second-quarter financial results and said its retail revenue has increased by 7.8 per cent in Q2 and 6.7 per cent so far this year. The company announced a 14 per cent increase in net income attributable to shareholders.

The $177.4-million profit was up from $156 million the year before. Compared to last year, revenue has also increased 5.9 per cent to $3.67 billion from $3.48 billion, which is in large part due to retailing.

With files from The Canadian Press