Party City announced on Friday that it will be closing all of its stores and has started corporate layoffs immediately, as reported by CNN. CEO Barry Litwin informed corporate employees in a meeting, as seen by CNN, that the company needs to begin a winddown process right away, with Friday being their last day of work.
Litwin expressed during the meeting that delivering this message was the most challenging task he has ever faced. CNN stated that the closure of the company is a result of ongoing financial difficulties faced by the party supply retailer, which had filed for bankruptcy protection less than two years ago due to its inability to repay $1.7 billion in debt.
The New Jersey-based chain emerged from bankruptcy in September 2023 after transitioning into a privately held company and eliminating nearly $1 billion in debt. Despite the bankruptcy, the majority of its 800 U.S. stores managed to remain open.
Litwin, who became CEO in August, had previously mentioned opportunities to enhance financial performance and create a top celebration experience for consumers. Before joining Party City, he served as the CEO of Global Industrial Company, a leading distributor of industrial products.
Competition in the party goods and costume industry has intensified in recent years, with Spirit Halloween gaining popularity both during and outside the Halloween season. In October, the holiday costume chain announced plans to open 10 new “Spirit Christmas” stores, some of which would be converted from existing Spirit Halloween locations.
The rise of online retailers has also impacted Party City’s operations, despite the company’s move to offer products on Amazon in 2018. Party City representatives did not respond immediately to CNBC’s request for comments regarding CNN’s report or the potential closures.
