After nearly forty years as an American institution, Party City is going bankrupt.
The festive and craft retailer will close all 850 stores in the coming weeks as it clears stock – with a deadline of February 1.
CEO Barry Litwin delivered the devastating news to his employees during a video conference call on Friday viewed by CNN.
These are bleak times for US retailers, as non-essential spending plummets due to the rising cost of living.
Just this week, budget retailer Big Lots kicked off an epic ‘going out of business’ sale as it prepares to close all locations
Meanwhile, US department store Macy’s will close 65 stores within weeks.
Retail experts warn this could be just the beginning, with 2024 set to see the highest number of store closures since the pandemic.
So far this year, US retailers have closed 7,300 stores – almost 60 percent more than in 2023.
Litwin – who was only announced as CEO four months ago – told the company’s staff that this was their last day on the job.
Party City will immediately close all of its stores, ending nearly forty years of existence
“That’s without a doubt the hardest message I’ve ever had to deliver,” Litwin said during the call.
Party City’s best efforts have not been enough to overcome declining sales and rising costs – resulting in the company’s collapse.
“It is very important for you to know that we have done everything possible to prevent this outcome,” Litwin added. ‘Unfortunately, it is necessary to immediately start a reduction process.’
The New Jersey-based party supply giant, which once dominated the market with balloons, Halloween costumes and decorations, is buckling under the weight of competition from Amazon, Walmart and pop-up rivals like Spirit Halloween.
Online shopping trends and a helium shortage have also hit the company hard.
Party City, the largest party supplies retailer in the U.S., employed approximately 6,400 full-time and 10,100 part-time employees in 2021.
When Litwin took over in August, he promised to strengthen Party City’s finances.
A cloud of uncertainty has hung over Party City since the company filed for Chapter 11 bankruptcy in January 2023. It didn’t stop until September.
Despite being rescued from bankruptcy in 2023, the retailer never recovered
The company had wiped out $1 billion of its $1.7 billion debt. It also managed to keep the majority of its more than 800 stores open, although more than 80 locations were closed between late 2022 and August 2024.
Party City – based in Woodcliff Lake, New Jersey – underwent a restructuring when lenders including Monarch Alternative Capital and Silver Point Capital took over and managed to pay off about $1 billion of its debt, allowing about 850 stores to open to stay.
Although some stores were saved, more than 60 were forced to close, including five in Topeka, Kansas, Salina, New York, Joplin, Missouri, and Owensboro, Kentucky, and most recently in Staten Island.
But the remaining debt of $800 million proved too much.
Party City was successfully expanding before the pandemic and had revenue of $2.35 billion in 2019, according to Forbes.
Overnight, key customers – those hosting or attending parties – had no reason to shop in store as social distancing was introduced.
As the country emerged from lockdowns, it was plagued by supply chain problems, rampant inflation and increased competition.
At the time, the popular retailer was trading at just 40 cents, having once reached nearly $23.
Former CEO Brad Weston previously said of the 2023 bankruptcy: “Today’s action to strengthen PCHI’s balance sheet will strengthen our ability to further advance our strategic priorities and continue to innovate and improve the customer experience.
“As we take this important step to put our company on a stronger financial footing for the future, we are as committed as ever to inspiring joy by making it easy for our customers to create unforgettable memories.”
Weston has since stepped down as CEO of Party City and Barry Litwin will succeed him in August.
The New Jersey-based party suppliers, which once dominated the market with balloons, Halloween costumes and decorations, are buckling under the weight of competition from Amazon, Walmart and pop-up rivals like Spirit Halloween.
In addition to falling behind since the pandemic, Party City has had to compete with other big-name retailers like Walmart and Target, and the occasional pop-up store Spirit Halloween.
That pressure has increased in an era of rising prices, including for helium used in party balloons, and declining consumer demand.
“Party City used to be one of the best games in town, but it’s now a runaway operation,” Neil Saunders, managing director of Global Data Retail, said last year.
“There’s probably still a role for Party City,” he continued, adding that the company should consider beefing up its online website.