Yes, Party City Is Going out of Business and Has Already Let Go of Corporate Executives

Sad news hit on Dec. 20, 2024, adding to concerns that in-store shopping might be fading away. Party City CEO Barry Litwin announced in a meeting viewed by CNN that the iconic party supplier is going out of business — done, finished. All Party City stores are set to close, with some slated to shut their doors as early as Feb. 28, 2024.

Party City emerged from bankruptcy in October 2023, aiming for a fresh start with a stronger foundation amid a struggling economy and rising inflation.

However, even after reducing its debt, the efforts fell short. Litwin addressed the situation, stating, "It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome." While the reasons may seem obvious, here’s what Litwin highlighted as the key factors behind Party City’s closures.

Party City is closing all of its nearly 800 stores across the United States, citing financial challenges. The company's struggles include rising costs driven by inflation and a decline in consumer spending. Litwin acknowledged that Party City’s "very best efforts have not been enough to overcome" these hurdles, which are presumed to be the primary reasons for the company's closure.

Party City’s financial struggles are not a new issue. The company (Party City Holdco Inc.) filed for Chapter 11 bankruptcy in January 2023. By October 2023, it emerged "financially stronger and well-positioned for the future." This was achieved by eliminating $1 billion in debt, allowing the company to keep nearly 800 stores open and operating at the time.

But as the economy continues its downward spiral and more people turn to e-commerce sites like Amazon, it's becoming increasingly difficult for physical stores to compete. The overhead costs alone are crippling, and with fewer people shopping in stores, operating them is no longer generating profit but instead deepening financial losses for many companies.

Bed Bath & Beyond faced a similar fate, closing all its stores after emerging from Chapter 11 bankruptcy with the hopeful vision of maintaining its locations. It’s an unfortunate reality, but a hard truth we must confront: The dynamics of retail have changed and will continue to change.

To make matters worse, Litwin announced in the meeting that, in addition to closing all of its stores, Party City would be laying off its corporate employees. While it’s unclear exactly how many are impacted by this news, CNN reported that staff was informed at the meeting that that would be their last day of employment. To make the situation even more gut-wrenching, they were told they would not be receiving severance pay.

As the company winds down its operations, employees’ benefits would also be terminated, though no specific date for this change was provided. "That is without question the most difficult message that I’ve ever had to deliver," Litwin shared during the conference call with corporate employees.

So, if you're a fan of Party City or simply enjoy browsing the aisles stocked with an endless array of color-coordinated party supplies, now's the time to get your fix. Stores are set to begin closing soon, so make sure to take advantage of what's left before they’re gone for good.