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

The New Jersey-based company faced inflationary pressures on product costs that reduced consumer spending, according to CEO Barry Litwin. Combined with other factors, such as $800 million in outstanding debt, the company filed for its second bankruptcy.

Party City Holdco Inc. had previously filed for bankruptcy in January 2023 after the company struggled to pay off nearly $1.7 billion in debt. According to recent financial filings, the company ended up saving nearly $1 billion and closing more than 80 locations between the end of 2022 and August 2024. Party City named Litwin CEO in August and emerged from bankruptcy a month later.

In its most recent filing, Party City said it had made “significant efforts” to find a path that would allow it to continue operating.

“It’s really important for you to know that we have done everything possible to try to prevent this outcome,” Litwin told company employees Friday in a briefing watched by CNN. “Unfortunately, it is necessary to begin the resolution process immediately.”

The company faced competition from e-commerce sites and pop-up delivery concepts like Spirit Halloween. Large retailers have also crushed smaller chains.

Major chains are on track to close the highest number of stores in a year since 2020, according to Coresight Research. On Thursday, Big Lots said it would begin selling all of its locations after a private equity firm’s plan to save the company from bankruptcy failed.