New York
CNN
—
Party City is closing down all of its stores, ending nearly 40 years in business, CNN has learned.
CEO Barry Litwin told corporate employees Friday in a meeting viewed by CNN that Party City is “winding down” operations immediately and that today will be their last day of employment.
“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said at the meeting, which was held on a video conference call.
Party City’s “very 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’ve done everything possible that we could to try to avoid this outcome,” Litwin said. “Unfortunately, it’s necessary to commence a winddown process immediately.”
Party City didn’t 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 a 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 exited bankruptcy a month after Litwin’s arrival. It had declared bankruptcy in January 2023. The company had struggled to pay off its $1.7 billion debt load, 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 to August 2024, according to its most recent financial documents.
But it still had more than $800 million in debt to overcome, which strained earnings this year.
Party City is the largest party supply store in the United States. The company had approximately 6,400 full-time and 10,100 part-time workers as of 2021.
The company, which sells balloons, Halloween costumes and other party goods, has stumbled in the face of growing competition from e-commerce sites and pop-up concepts like Spirit Halloween. Competition from big-box 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, which 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 it was starting “going out of business” sales at all of its locations after a plan for a private equity firm to rescue the bankruptcy 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.
