Party City Shutting Down After Nearly 40 Years in Business
Party City, a leading name in party supplies for decades, is closing all its stores, marking the end of nearly 40 years in business. CEO Barry Litwin informed corporate employees during a Friday video conference, viewed by CNN, that the company is “winding down” operations effective immediately. Employees were told that their jobs would end that day, severance pay would not be provided, and benefits would cease as the company shuts its doors.
“This is, without question, the most difficult message I’ve ever had to deliver,” Litwin said during the emotional announcement.
Financial Struggles and the Collapse
Litwin cited insurmountable financial challenges, including inflationary pressures and reduced consumer spending, as the main drivers behind the company's downfall. “We’ve done everything possible to try to avoid this outcome,” Litwin said. “Unfortunately, it’s necessary to commence a wind-down process immediately.”
Store employees received letters Friday confirming that all Party City locations would close by February 28, at which point their employment would be terminated.
Party City had faced mounting financial difficulties for years. The company emerged from bankruptcy just months ago, having canceled nearly $1 billion in debt after a January 2023 filing. However, it was still burdened by over $800 million in debt, which proved too great a strain. Despite efforts to stay afloat, including closing more than 80 stores between 2022 and 2024, the company could not overcome the challenges.
A Sudden and Emotional End
Signs of trouble emerged earlier this month when Party City’s product development team was abruptly recalled from an annual vendor trip, with management citing safety concerns due to unpaid suppliers. On December 10, corporate employees were sent home, and access to the company’s headquarters was restricted.
During Friday’s call, Litwin apologized for the lack of communication leading up to the closure, acknowledging the anger and confusion among staff. Karen McGowan, Chief Human Resources Officer, broke down in tears multiple times while explaining severance and benefits.
A Legacy of Challenges
Party City, known for its balloons, costumes, and other celebratory goods, had long been a leader in the party supply industry. However, it struggled against rising competition from online retailers like Amazon, big-box stores like Walmart, and seasonal pop-up stores such as Spirit Halloween. The COVID-19 pandemic exacerbated its financial woes, with rising costs and a helium shortage further impacting its balloon business, a key revenue driver.
The closure adds Party City to a growing list of major retailers shutting down in 2024. Big Lots also recently announced the closure of all its locations following a failed rescue effort. According to Coresight Research, 2024 is on track to see the highest number of retail store closures since 2020.
For Party City, the end marks not just the conclusion of a business, but the close of a nearly 40-year legacy of helping people celebrate life’s milestones.
