Party City, the largest party supply store in the United States, is going out of business and closing down all of its stores, CNN reported.
An exterior view of the Party City party supplies store. (Photo by Paul Weaver/SOPA … [+] Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Key Facts
The company will be “winding down” operations immediately and today will be the last day of employment for corporate employees, chief executive Barry Litwin reportedly said in a meeting Friday.
Employees will reportedly not receive severance pay and their benefits will end as the company closes, CNN reported.
Employees expressed frustration over the lack of communication, CNN reported citing unnamed sources, as management did not mention potential financial trouble at recent meetings (Litwin reportedly apologized for the lack of communication at the Friday meeting).
Store managers were notified that Party City stores will be shut by February 1, CNN said.
News of the company’s closure has reportedly been circulating in the past few weeks after its product development team was told to return home immediately two weeks ago from their yearly trip with vendors.
Key Background
The party supply store has been struggling financially for years. It faced a helium shortage in 2019, which forced it to close 45 stores as balloon sales—a core part of its business and one of its most profitable services—dropped its overall sales by 1.4%. Surging costs related to the pandemic and increased competition from big retail chains and online retailers like Target, Walmart and Spirit Halloween have also cut into the company’s market share. The company has faced losses every year since 2019 and declared bankruptcy in January 2023.
Crucial Quote
The company’s “very best efforts have not been enough to overcome” financial challenges, Litwin reportedly said at the meeting, as inflation meant that consumers spent less while costs rose.
Big Number
$1.7 billion. That’s how much the company had in debt when it declared bankruptcy, when it said it had gotten $150 million to keep its stores open. The company canceled $1 billion in debt by declaring bankruptcy, though it closed more than 80 locations in the past two years.
