After nearly 40 years, Party City closes its doors.

Party City, a mainstay of the American party supply market for almost 40 years, has declared that all of its locations will be closing.

CEO Barry Litwin broke the heartbreaking news that operations would stop immediately, leaving thousands of workers without jobs, in a poignant speech to corporate employees on Friday.

In a CNN video conference, Litwin said, “This is without a doubt the most difficult message I’ve ever had to deliver.”

After almost 40 years in operation, Party City, the largest party supply company in the US, has announced that it would close all of its locations.

He affirmed that once the business starts its wind-down process, benefits would be discontinued and employees would not get severance money.

What Can Party City Customers Expect Next?

Customers may notice that the remaining merchandise is being sold at clearance pricing as the business closes.

But Party City’s status as the biggest party supply chain in the US will be a thing of the past after its locations close by February 2025.

Background: In January 2023, Party City declared Chapter 11 bankruptcy, owing over $1.7 billion.

The company emerged from bankruptcy in September 2023, having paid off nearly $1 billion in debt and shutting down a number of failing outlets.

What Caused the Collapse of Party City?

Financial Difficulties Due to Increasing Expenses

Inflation, which raised operating costs and decreased consumer spending, was one of the issues Litwin cited as contributing to the company’s demise.

Party City was unable to overcome its problems in spite of efforts to stabilise its finances.

Litwin emphasised that the company’s best efforts were insufficient and stated, “We’ve done everything possible to avoid this outcome.”

Growing Debt Following Bankruptcy

With $1.7 billion in debt, the New Jersey-based business filed for bankruptcy in January 2023.

The remaining $800 million in debt continued to put pressure on earnings into 2024, despite the fact that the bankruptcy allowed Party City to cancel nearly $1 billion of its debt and keep the majority of its 800+ locations operating.

Important Points:

Immediate Closure: CEO Barry Litwin notified staff that they would be leaving their jobs on December 20 and that operations would be shutting down immediately.

Individuals

No Severance compensation:

Employees were informed that their benefits would end when the business went out of business and that they would not get severance compensation.

Financial Difficulties: The company attributed the closure on financial difficulties, such as inflation and a decline in customer expenditure.

 

Effect on Workers

Store closures and unexpected layoffs

 

All stores will close by February 28, 2025, according to official notices given to certain staff on Friday.

Workers were shocked and upset, especially at management’s lack of prior communication.

On December 10, business employees were sent home, and the corporate headquarters was locked by security.

Citing safety concerns, an internal email instructed staff to alert security before entering the building.

Industry Background:

The closing of Party City is a part of a larger pattern of store closures and retail bankruptcy in 2024 as customers reduce their discretionary spending in response to growing living expenses.

This year, closures have also been announced by other shops, including Big Lots.

Heartfelt Goodbyes

 

During the announcement call, Karen McGowan, the Chief Human Resources Officer at Party City, started crying.

McGowan apologised for the emotional toll on staff members, saying, “I certainly know this is a lot to take in.”

 

Party City: Its Ascent and Decline

In a Changing Market, Competition

E-commerce behemoths like Amazon and Walmart, as well as transient pop-up shops like Spirit Halloween, were becoming a bigger threat to Party City. Its balloon industry, which is a major source of revenue, was further harmed by a shortage of helium and rising expenses during the pandemic.

 

A Wider Pattern of Store Closures

Party City is the latest retailer to close their doors in 2024.

According to Coresight Research, it has been one of the worst years for retail bankruptcies since 2020, with chains such as Big Lots announcing closures as a result of financial difficulties.

Large-scale layoffs at Party City’s corporate office

Workers at Party City’s headquarters in Woodcliff Lake, New Jersey, were shocked to learn of mass layoffs by email on December 20, 2024.

The company, which just came out of bankruptcy, is ending an era by closing all 850 of its stores in the United States.

This decision comes after years of financial difficulties, during which Party City had to contend with fierce competition from online retailers and the growing expenses of running physical locations.

Party City Stores Will Close When?

Employees say that by March 31, 2025, all Party City outlets will close. Customers can browse clearance discounts as the business gets rid of its leftover stock in the interim.

Party City is closing; why?

Party City’s decision to shut down was influenced by a number of factors:

Increasing Competition:

Customers may now purchase party supplies more easily and affordably thanks to online merchants like Amazon.

Pandemic Impact:

 

The business was severely impacted by supply chain interruptions and growing product costs.

Financial Difficulties:

 

The business had trouble recovering even after wiping off $1 billion in debt when it filed for bankruptcy in early 2023.

Impact on Employees:

10,100 part-time employees and 6,400 full-time employees are impacted by the closure.

Workers complained about the lack of communication, with some receiving termination letters or internal chats informing them of the closure.

 

In conclusion

The demise of Party City serves as a sobering reminder of the difficulties faced by physical retailers in a retail environment that is changing quickly.

The chain’s demise is a reflection of larger changes impacting the business, including the growth of internet shopping and financial strains.

The celebration is gone for the staff and devoted patrons, but the memories of Party City’s legendary role in festivities will live on.