New York – 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 chain is the largest party supply store in the United States and recently emerged from bankruptcy in September 2023. This plan included canceling nearly $1 billion in debt, liquidating their stock, and maintaining much of their 800 U.S. stores.

However, Party City managed to avoid the same fate as Bed Bath in the short term & Beyond and 99 Cents Only Stores still had to pay down more than $800 million in debt, weighing on earnings this year.

The company had closed more than 80 stores from the end of 2022 to August 2024, according to its most recent financial filings.

Party City said in an earlier statement that it had renegotiated many of its leases and exited “less productive locations,” resulting in many of the chain’s employees remaining employed. The company employed approximately 6,400 full-time and 10,100 part-time employees in 2021.

Party City filed for bankruptcy in January 2023 after struggling to pay off its $1.7 billion debt load. As a result, it was also delisted from the New York Stock Exchange.

The New Jersey-based company announced Litwin as its new CEO just four months ago. In a LinkedIn post, he said the company’s “main priority is to strengthen our financial health, and there is still much work ahead.”

Party City’s net sales fell to $407 million in the three months ended September 2023, compared to $502 million in the same period in 2022, according to the company’s latest financial disclosures.

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 going 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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