It’s the end of an era.
After nearly four decades of supplying streamers and balloons for your New Year’s Eve bashes and birthday celebrations, Party City has announced that its closing all of its stores and filing for Chapter 11 bankruptcy.
Here’s everything you need to know about the impending closure.
Bankruptcy and Layoffs
On Dec. 20, Party City CEO Barry Litwin announced to employees that the company was winding down operations immediately.
“It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome,” Litwin said during a video conference call, CNN reports.
Staff were told they wouldn’t get severance pay, and their benefits would stop as the company shuts down.
“Unfortunately, it’s necessary to commence a wind down process immediately.”
Massive Layoffs
On Friday, store staff received letters stating that all stores will officially close by Feb. 28, 2025.
Until then, Party City’s roughly 700 locations will remain open for “going out of business” sales while supplies last.
The company added that about 95% of its 12,000 employees will remain on staff through the closure period.
“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said at a video conference on the same day.
Red Flags
In the weeks leading up to the announcement, signs of the company’s demise became apparent to some employees. The product development team was recalled from an annual vendor trip mid-travel, citing unpaid supplier bills as a safety concern.
On Dec. 11, corporate headquarters were locked, and employees were told they needed advance notice to gain access.
Party City’s Financial Struggles
Party City first filed for Chapter 11 bankruptcy in January 2023, wiping out nearly $1 billion in debt in an effort to stay afloat.
By August, Barry Litwin stepped in as CEO to steer the company through restructuring. While the move kept most stores open temporarily, mounting debt, rising costs, and a drop in consumer spending proved too much to overcome.
Party City History
Founded in 1986, the New Jersey-based retailer grew to become the largest party supply store in the United States. By 2021, the company employed approximately 6,400 full-time and 10,100 part-time workers and offered everything from balloons to costumes across its 748 stores in North America.
For more smart retail coverage, sign up for our free newsletters.
