Party City announced on Friday that it will close all its stores nationwide and begin corporate layoffs effective immediately. CEO Barry Litwin informed employees during a company-wide meeting that Friday would be their final day with the organization as the party supply retailer commences a wind-down process.
“This is without question the most difficult message I’ve ever had to deliver,” Litwin told employees during the meeting.
The decision follows persistent financial challenges for the New Jersey-based chain, which filed for bankruptcy protection less than two years ago due to $1.7 billion in debt. Party City emerged from bankruptcy in September 2023, transitioning into a privately held company and eliminating nearly $1 billion in debt. At the time, the company kept most of its 800 U.S. stores operational.
Litwin, appointed as CEO in August 2024, initially expressed optimism about the company’s future, citing opportunities to improve financial performance and provide an enhanced celebration experience for customers. Before joining Party City, he served as CEO of Global Industrial Company, a leading distributor of industrial products.
Despite restructuring efforts, Party City faced increasing pressure from competitors and changing consumer habits. Spirit Halloween, a seasonal rival, has expanded its presence both during and outside of the Halloween season, recently announcing the launch of “Spirit Christmas” stores. In addition, the rise of online retailers, including Party City’s move to sell products on major e-commerce platforms starting in 2018, added further challenges to its brick-and-mortar operations.
The retail landscape for party supplies and costumes has shifted significantly, with traditional chains struggling to compete against agile online marketplaces and specialty seasonal stores. Party City’s closure marks the end of an era for one of the most recognizable brands in the party goods industry.
The company has not provided specific details about its wind-down process or the fate of its remaining assets. However, the closures signify the challenges faced by traditional retailers in adapting to evolving market dynamics and growing competition in the digital age.
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