Party City has officially announced its plans to close all stores across the country after nearly 40 years of operation, following its second bankruptcy filing within two years. The New Jersey-based company, which serves as the nation’s largest party supply chain, informed employees during a video conference on December 20, 2024, marking what CEO Barry Litwin described as the "most difficult message" he had ever to deliver to the team.
The closure announcement came just days before Christmas, eliciting sentiments of sadness among employees, many of whom will not receive severance pay. According to reports, employees were informed their benefits would end immediately upon the company’s winding down process. Litwin conveyed to the corporate staff, "That is without question the most difficult message I’ve ever had to deliver," highlighting the emotional toll of the sudden decision.
Ballooning inflation and fierce competition from e-commerce giants like Amazon and big-box retailers such as Walmart have severely impacted Party City's sales and profitability. Faced with nearly $1.7 billion of debts and two successive bankruptcy filings, the company struggled to recoup and sustain itself financially. Despite efforts to restructure and reduce debt, collection and sales issues continued. Party City managed to cut its debt load by about $1 billion during its prior Chapter 11 reorganization but could not escape the mounting economic pressures.
“Unfortunately, it’s necessary to commence a winddown process immediately,” Litwin revealed during the meeting with employees, indicating the company’s struggle to navigate through challenging market conditions. After initially declaring bankruptcy protection earlier this year, which allowed Party City to shut down over 80 locations, including numerous underperforming stores, the final phase of closures has begun.
Starting immediately, Party City began “going-out-of-business” sales, offering discounts as high as 50% off merchandise, inviting customers to take advantage of the last days of shopping at their local stores. Approximately 12,000 employees will be laid off as all 700 U.S. locations prepare to shutter permanently by February 28, 2025.
The legacy of Party City, which has prided itself on being the largest party retailer in North America, is now diminishing as this announcement reinforces the hardships many retailers face today. Founded almost 40 years ago, the retailer had gradually grown to be the go-to destination for all celebration needs, but changing consumer habits and fierce competition have overshadowed its initial success.
Litwin assumed leadership of Party City last August, following the previous bankruptcy filing. His immediate objective was to reposition the company strategically; unfortunately, those plans have failed to yield positive results. While making the store environment accessible for consumers, the competitive market dynamics and rising costs proved insurmountable under current economic conditions.
Party City previously filed for Chapter 11 protection back on January 17, 2023. The pandemic had significantly weakened the company's operations, exacerbated by supply chain interruptions and ingredient shortages. The once profitable balloon segment of the business faltered due to helium shortages during the pandemic, posing challenges at an already turbulent time for retail.
The drastic closures have also raised alarm bells across the retail sector, where many chains—including Big Lots, which recently announced plans to close its store locations—struggle to navigate similar economic challenges. Big Lots entered bankruptcy after proposed rescue talks fell through, serving as a grim reminder of the mounting pressures within the retail industry.
While the physical storefronts of Party City’s chain may close, the brand’s impact on American culture over the decades remains significant. The retailer enjoyed many years as the primary source for party supplies from birthdays to holidays and specialized decor. Many families have formed lasting memories gathering supplies from Party City.
The company’s announcement marks the end of decades of service to various celebrations for families across the United States. Representatives at Party City encourage customers to visit stores during their final days to continue gathering items and saying farewell to the beloved chain. "It has been a true pleasure to be part of your most special moments over the years…", said Party City, recognizing the disappointment felt within shopping communities.
For many employees, the closure signifies not only the loss of their workplace but also the end of traditions associated with the retailer. With official closure set for February 28, 2025, and its operations winding down, the final chapter of Party City is being written.
