Party City, a mainstay in party supplies and celebrations for nearly four decades, is closing its doors for good, CNN reports.
The decision to wind down operations marks the end of the company’s efforts to overcome financial difficulties, as revealed in a corporate meeting on Friday.
CEO Barry Litwin announced to corporate employees that Party City is “winding down” operations effective immediately. Employees were informed that:
- Friday would be their last day of employment, with no severance pay.
- Benefits would cease as the company dissolves.
“This is without question the most difficult message I’ve ever had to deliver,” Litwin said during a video conference call.
He emphasized that the company had done everything possible to avoid this outcome.
Party City’s financial troubles have been years in the making, compounded by:
- Inflation: Rising costs and reduced consumer spending weighed heavily on earnings.
- Debt Load: After exiting bankruptcy earlier in 2024, Party City still carried over $800 million in debt.
- Helium Shortages: Key to its balloon business, helium supply issues hurt revenue.
- Competition: Rivals like Amazon, Walmart, and Spirit Halloween eroded Party City’s market share.
The company had managed to cancel nearly $1 billion in debt during its bankruptcy but could not stabilize its financial health.
Store employees received letters confirming closures by February 28, 2025. The closures will affect thousands of workers, both corporate and retail.
Party City previously operated over 800 stores but had already downsized, closing more than 80 locations since late 2022.
News of Party City’s impending collapse caught employees off guard, as management had recently expressed optimism about the business.
- Product development staff were abruptly recalled from a vendor trip two weeks ago due to unpaid supplier invoices.
- Corporate employees were sent home on December 10, with access to the headquarters tightly restricted.
On an emotional video call, Chief Human Resources Officer Karen McGowan broke down as she apologized to employees for the abrupt and shocking closure.
Party City’s downfall is part of a larger wave of retail bankruptcies as consumers cut back on discretionary spending. Rising competition from e-commerce platforms and inflationary pressures have led to record-high store closures this year, according to Coresight Research.
Other notable closures include Big Lots, which began liquidation sales after a failed private equity rescue.
