• According to CNN, Party City’s CEO told employees that the specialty retailer is “ceasing operations.”
• The company was hit hard by the COVID-19 pandemic and never fully recovered.
• The company spent much of the last two years in bankruptcy proceedings and has closed 80 locations.

Party City’s balloon is out of air.

CEO Barry Litwin, who took the job in August, told Party City employees on Friday that operations would be “ceasing” immediately, CNN reported.

The news follows reports last week that the company was mulling a second bankruptcy in two years as debt continued to weigh on profitability.

A spokesperson for Party City did not immediately respond to a request for comment from Business Insider.

Litwin told employees that the company had done everything it could to avoid a shutdown but that it was “unfortunately necessary to begin a resolution process immediately,” CNN reported.

Party City dealt with a helium shortage for balloons before the pandemic, securing a new source of supply.

The COVID-19 pandemic had a severe impact as lockdowns and social distancing put an end to many celebratory gatherings and other mass retailers such as Amazon, Walmart and Target expanded their party supply offerings.

The company spent much of 2023 in bankruptcy proceedings and reportedly closed 80 locations, about a tenth of its store fleet.

The company emerged from bankruptcy in September 2023 after a judge canceled $1 billion of its debt. A year later, Litwin was named CEO.