The Party City stores close as the company goes bankrupt

New York
CNN
—

Party City is closing all of its stores, ending nearly 40 years in business, CNN has learned.

CEO Barry Litwin told the company’s employees Friday in a meeting seen by CNN that Party City is “winding down” operations effective immediately and that today will be their last day of employment.

“It’s without a doubt the most difficult message I’ve ever had to deliver,” Litwin said at the meeting, which was held on a video conference call.

Party City’s “best efforts have not been enough to overcome” its financial challenges, he added, resulting in the company’s collapse.

“It’s really important for you to know that we did everything we could to try to avoid this outcome,” Litwin said. “Unfortunately, it is necessary to begin a liquidation process immediately.”

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

Bankruptcy and collapse

The New Jersey-based company announced Litwin as its new CEO just four months ago. In one LinkedIn post he wrote when he was hired, he said the company’s “main priority is to strengthen our financial health and there is work ahead of us.”

Party City went out of bankruptcy a month after Litwin’s arrival. It had declared bankruptcy in January 2023. The company had been struggling to pay off its $1.7 billion in debt, and it was able to cancel nearly $1 billion in debt by going bankrupt. It also managed to keep most of its more than 800 stores open, although it closed more than 80 locations between the end of 2022 and August 2024, according to its latest financial filings.

But it still had more than $800 million in debt to overcome, which weighed on earnings this year.

Party City is the largest party store in the United States. The company had approximately 6,400 full-time employees and 10,100 part-time employees in 2021.

The company, which sells balloons, Halloween costumes and other party items, has stumbled in the face of increasing competition from e-commerce sites and pop-up concepts like Spirit Halloween. Competition from big retailers like Amazon, Walmart, Costco and others also crushed smaller chains.

It also had to contend with rising costs during the pandemic and a helium shortage that hurt its crucial balloon business.

The chain joins a growing list of retailer bankruptcies this year as customers cut back on discretionary spending amid the rising cost of living. Notably, Big Lots announced Thursday that it began “exiting” sales at all of its locations after a plan by a private equity firm to rescue the bankrupt retailer failed.

Major chains are on track to close the highest number of stores in 2024 than in any year since 2020, according to Coresight Research.