CEO Barry Litwin told corporate employees Friday in a meeting viewed by CNN that Party City is "winding down" operations immediately and that today will be their last day of employment.
"That is without question the most difficult message that I've ever had to deliver," Litwin said at the meeting, which was held on a video conference call. Party City's "very best efforts have not been enough to overcome" its financial challenges, he added, resulting in the company's collapse.
"It's really important for you to know that we've done everything possible that we could to try to avoid this outcome," Litwin said. "Unfortunately, it's necessary to commence a winddown process immediately."
Party City didn't immediately respond to CNN's request for comment.
Bankruptcy and collapse
The chain is the largest party supply store in the United States and recently exited bankruptcy in September 2023. That plan included the canceling of nearly $1 billion in debt, the dissolution of its stock and a majority of its 800 US stores staying open.
Though in the short term Party City managed to avoid the same fate as Bed Bath & Beyond and 99 Cents Only Stores, it still had more than $800 million in debt to overcome, which strained earnings this year.
The company had closed more than 80 stores from the end of 2022 to August 2024, according to its most recent financial documents.
Party City said in a previous statement that it had renegotiated many of its leases and exited "less productive locations," which resulted in many of chain's workers remaining employed. The company had approximately 6,400 full-time and 10,100 part-time workers as of 2021.
Party City filed for bankruptcy in January 2023 after struggling to pay off its $1.7 billion debt load. As a result, it was also delisted from the New York Stock Exchange.
The New Jersey-based company announced Litwin as its new CEO just four months ago. In a LinkedIn post, he said the company's "main priority is to strengthen our financial health, and there is work ahead of us."
Net sales for Party City decreased to $407 million for the three months ending in September 2023, compared to $502 million in the same period in 2022, according to the company's latest financial disclosures.
The company, which sells balloons, Halloween costumes and other party goods, has stumbled in the face of growing competition from e-commerce sites and pop-up concepts like Spirit Halloween. Competition from big-box retailers like Amazon, Walmart, Costco and others also crushed smaller chains.
It also had to contend with rising costs during the pandemic and a helium shortage, which hurt its crucial balloon business.
The chain joins a growing list of retailer bankruptcies this year as customers cut back on discretionary spending amid the rising cost of living. Notably, Big Lots announced Thursday it was starting "going out of business" sales at all of its locations after a plan for a private equity firm to rescue the bankruptcy retailer failed.
Major chains are on track to close the highest number of stores in 2024 than in any year since 2020, according to Coresight Research.
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