Party City, once the largest supplier of party supplies in the US, is closing all its stores and ceasing operations after nearly 40 years in business. The announcement came Friday, leaving employees without severance pay or benefits. CEO Barry Litwin informed staff that the company was “winding down” immediately, ending their employment effective that day. He attributed the abrupt closure to insurmountable financial challenges, including inflation’s impact on costs and consumer spending, despite the company’s “best efforts.”
This closure comes just four months after Litwin’s appointment. In January 2023, Party City filed for bankruptcy under $1.7 billion in debt. While the bankruptcy process eliminated nearly $1 billion, leaving approximately 800 stores open, the remaining $800 million proved insurmountable. Corporate employees were sent home earlier this month, reportedly without warning. Litwin apologized to employees on Friday for the lack of communication surrounding the closure.
Party City’s demise, like many brick-and-mortar retailers, reflects an inability to adapt to the growth of e-commerce and competing pop-up shops, such as Spirit Halloween. The company also faced challenges due to a helium shortage, a crucial element of its balloon business.