After nearly 40 years of helping Americans celebrate life’s biggest moments, Party City, the nation’s largest party supply chain, has announced it will permanently close all its stores. The decision, revealed Friday, comes amid skyrocketing inflation, overwhelming debt, and tough competition from online and big-box retailers.
The announcement was made by CEO Barry Litwin during a video conference with corporate employees. Litwin, who joined the company just four months ago, said the winddown was the only viable path forward after exhaustive efforts to keep the business afloat.
A Long Struggle with Debt and Market Challenges
Party City’s financial troubles had been mounting for years. The company emerged from bankruptcy earlier this year after canceling nearly $1 billion in debt. Yet, with $800 million still owed to creditors, the burden proved too great to sustain operations.
The retail chain had already closed over 80 stores between late 2022 and mid-2024 in a bid to cut costs. However, these measures couldn’t offset the challenges posed by rising costs, a helium shortage that impacted its lucrative balloon sales, and stiff competition from Amazon, Walmart, and seasonal giant Spirit Halloween.
Adding to the turmoil, the company abruptly recalled its product development team from an annual vendor trip two weeks ago, citing safety concerns due to unpaid suppliers. Employees described this as the first sign of an impending collapse.
Shocking End for Employees
Store employees received letters confirming all locations would close by February 28, 2024. Termination notices were also issued to staff at the company’s New Jersey headquarters, which was shuttered on December 10. Many employees expressed anger and frustration, saying they were blindsided by the sudden news.
“It’s heartbreaking. We thought there was still a chance for recovery,” said a long-time employee who asked to remain anonymous.
A Broader Retail Crisis
Party City’s closure underscores a growing trend in the retail sector. This year alone, major chains like Big Lots have also filed for bankruptcy. Industry analysts point to inflation, shifts in consumer behavior, and the dominance of e-commerce as key drivers behind the retail shakeout.
In a statement on Friday, Litwin expressed regret over the outcome. “We did everything possible to avoid this. Unfortunately, the market conditions left us with no choice but to wind down operations.”
For millions of customers who turned to Party City to celebrate birthdays, weddings, and holidays, the closure marks the end of an era—and the party, for now, is over.
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