Party City to Shut Down All Stores After Nearly 40 Years in Business

Party City to Shut Down All Stores After Nearly 40 Years in Business

Party City, the largest party supply chain in the United States, is closing its doors for good, marking the end of a nearly four-decade-long run. According to CNN, CEO Barry Litwin announced the closure to corporate employees during a video conference on Friday, stating that operations would cease immediately and that the day would be the last of employment for staff.

“This is, without a doubt, the most difficult message I’ve ever had to deliver,” Litwin said during the call. Despite “very best efforts,” the company could not overcome its financial difficulties, ultimately leading to its collapse. “We’ve done everything possible to avoid this outcome,” he added, emphasizing the necessity of initiating the shutdown process.

The company, headquartered in New Jersey, did not respond to CNN’s request for comment.

From Bankruptcy to Closure

Party City, which filed for bankruptcy in January 2023, has struggled to regain financial stability in recent years. Although it emerged from bankruptcy in September 2023 after restructuring nearly $1 billion in debt and closing several stores, the challenges persisted. The company faced over $800 million in debt, straining its earnings and limiting its ability to recover.

Since late 2022, Party City has closed more than 80 stores, leaving fewer than 800 locations operational by mid-2024. Efforts to renegotiate leases and exit underperforming locations provided temporary relief, but the company continued to face declining sales and mounting financial pressure.

In its most recent financial disclosures, Party City reported a net sales drop to $407 million for the three months ending September 2023, compared to $502 million in the same period in 2022.

Competition and Challenges

The company, known for its balloons, costumes, and party supplies, faced growing competition from e-commerce platforms, pop-up stores like Spirit Halloween, and big-box retailers such as Amazon, Walmart, and Costco. Additionally, the pandemic introduced rising costs and a helium shortage, significantly impacting Party City’s balloon business—a core part of its operations.

Litwin, who became CEO just four months ago, acknowledged the uphill battle in a LinkedIn post, stating the company’s focus was on strengthening its financial health.

Broader Retail Challenges

Party City’s closure is part of a wider trend in the retail sector. High inflation and rising living costs have prompted consumers to scale back discretionary spending, contributing to a surge in store closures. According to Coresight Research, 2024 is on track to see the highest number of store closures since 2020.

This week, Big Lots also announced “going out of business” sales across all locations after a failed rescue plan, adding to the growing list of retailers unable to weather the economic storm.

For Party City, the combination of competitive pressures, economic headwinds, and operational challenges proved insurmountable, leading to the end of an era for the beloved party supply cha