Party City has been a beloved brand in the party supplies market for nearly 40 years. Now, it is closing down all its stores across the nation.
The closure decision comes after a series of financial struggles that the company could not overcome, as stated by CEO Barry Litwin in a corporate meeting held on December 20, 2024. As per a CNN report, he mentioned,
"That is without question the most difficult message that I have ever had to deliver. It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome. Unfortunately, it is necessary to commence a winddown process immediately."
Bankruptcy and other challenges: Reasons behind Party City closure
Party City first filed for bankruptcy in January 2023. The company reportedly had $1.7 billion in debt at that time. After some strategic steps, the brand managed to restructure its finances and repaid nearly $1 billion in debt. As a result, it exited bankruptcy months later.
However, despite its efforts, it struggled with increasing operational costs due to inflation. Additionally, a helium shortage had a massive impact on its balloon business, which was a major source of revenue for the brand.
The financial strain rose. Moreover, Party City was still carrying over $800 million in debt. The company closed over 80 stores between late 2022 and mid-2024 to cut costs. The measures proved not to be enough to revitalize the business.
After joining the company four months ago, CEO Barry Litwin initially expressed optimism about rebuilding the beloved brand Party City. However, during a recent video conference with corporate employees, he reportedly announced that the company is going to begin winding down its operations with immediate effect.
The closure of corporate offices further accompanied the announcement. Employees were also left without severance pay and with immediate termination of benefits.
Store closures are expected to take effect by February 2025.
More about the Brand
Party City Holdco Inc., famously known as Party City, was founded in 1986 by Steve Mandell in New Jersey. The retail chain quickly established itself as a go-to destination for party supplies. It offered balloons, costumes, decorations for all occasions, and more.
At its peak, the company became the largest party supply retailer in the United States. It had over 700 operating stores, including company-owned and franchised locations.
However, Party City faced heavy competition over the years from e-commerce platforms like Amazon and global retailers such as Walmart and Costco. The rise of seasonal pop-up stores like Spirit Halloween further occupied its market share.
Party City is another addition to the list of retailers that lost to bankruptcy due to rising costs, changing consumer habits, and other reasons. This marks farewell to a brand that added celebration to events nationwide.
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