According to the report, Party City is going out of business and closing all stores

Topline

Party City, the largest party supply store in the United States, is ceasing operations and closing all of its stores, CNN reported.

An exterior view of the Party City party supply store. (Photo by Paul Weaver/SOPA … (+) Images/LightRocket via Getty Images)

SOPA Images/LightRocket via Getty Images

Important facts

The company will “cease operations” immediately and today will be the last day of work for the company’s employees, Chief Executive Barry Litwin reportedly said in a meeting Friday.

Employees will reportedly not receive severance pay and their benefits will end when the company closes, CNN reported.

Employees expressed frustration over the lack of communication, CNN reported, citing unnamed sources, as management did not mention potential financial problems in recent meetings (Litwin reportedly apologized for the lack of communication at the Friday meeting).

According to CNN, store managers have been informed that Party City stores will be closed until February 1st.

News of the company’s closure has reportedly been circulating in recent weeks after the product development team was ordered to immediately return home from its annual trip with suppliers two weeks ago.

Important background

The party supply store has been in financial trouble for years. In 2019, the company faced a helium shortage that forced the company to close 45 stores as balloon sales – a core part of its business and one of its most profitable services – saw its overall revenue decline by 1.4%. Rising costs related to the pandemic and increasing competition from large retail chains and online retailers such as Target, Walmart and Spirit Halloween have also eroded the company’s market share. The company has suffered losses every year since 2019 and filed for bankruptcy in January 2023.

Crucial quote

The company’s “very best efforts were not enough to address the financial challenges,” Litwin reportedly said at the meeting, as inflation caused consumers to spend less while costs rose.

Big number

$1.7 billion. That’s how high the company’s debt was when it filed for bankruptcy, saying it had received $150 million to keep its stores open. The company forgave $1 billion in debt by filing for bankruptcy even as it closed more than 80 locations in the last two years.

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