Party City stores are closing as the company goes out of business

Party City stores are closing as the company goes out of business


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CNN

Party City is closing all of its stores, ending nearly 40 years of business, CNN has learned.

CEO Barry Litwin told company employees in a meeting watched by CNN on Friday that Party City was immediately “ceasing operations” and that today would be their last day.

“This is without question the most difficult message I have ever had to deliver,” Litwin said at the meeting, which took place via video conference.

Party City’s “very best efforts were not enough to overcome its financial challenges,” he added, leading to the company’s collapse.

“It’s really important that you know that we did everything possible to prevent this outcome,” Litwin said. “Unfortunately, it is necessary to begin the resolution process immediately.”

Party City did not immediately respond to CNN’s request for comment.

Bankruptcy and collapse

The New Jersey-based company announced Litwin as its new CEO just four months ago. In a LinkedIn post he wrote to mark his hiring, he said the company’s “top priority is to strengthen our financial health, and we still have a lot of work to do.”

A month after Litwin’s arrival, Party City filed for bankruptcy. The company filed for bankruptcy in January 2023. The company struggled to pay off its $1.7 billion debt load and was able to forgive nearly $1 billion in debt through bankruptcy. Additionally, the company managed to keep most of its more than 800 stores open, although it closed more than 80 locations between the end of 2022 and August 2024, according to its most recent financial filings.

However, the company still had to pay off more than $800 million in debt, weighing on earnings this year.

Party City is the largest party supply store in the United States. The company employed approximately 6,400 full-time and 10,100 part-time employees in 2021.

The company, which sells balloons, Halloween costumes and other party supplies, has stumbled amid growing competition from e-commerce sites and pop-up concepts like Spirit Halloween. Competition from major retailers like Amazon, Walmart, Costco and others has also crushed smaller chains.

The company also struggled with rising costs during the pandemic and a helium shortage, hurting its important balloon business.

The chain joins a growing list of retailer bankruptcies this year as customers cut back on leisure spending amid rising living costs. Notably, Big Lots announced Thursday that it would begin selling “out of business” at all of its locations after a private equity firm’s plan to rescue the bankrupt retailer failed.

Major chains are on track to close the highest number of stores in 2024 than at any time since 2020, according to Coresight Research.

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