Party City will be closing all 850 of its U.S. stores after being in business for nearly 40 years.
On Friday, Party City CEO Barry Litwin told corporate employees in a meeting that the company is ‘winding down’ operations and that they will no longer be employed.
The staff were also told they will not be given severance pay and that their work benefits will end as soon as the company shuts down.
Litwin said in the video conference call that it’s ‘the most difficult message [he’s] ever had to deliver’.
Despite the company’s ‘very best efforts’, it was not able to overcome its financial difficulties, which were partly driven by inflation.
The same day as the meeting, many store employees received letters stating that the company would be shutting down all stores on February 28, which would also be their final day of employment.
The letter stated that the shut downs are in the company’s best interests and thanked the employees for their ‘valued contributions and service’.
Collapse of the Company
In August, Party City appointed Litwin as its new CEO. Shortly afterward, he wrote on LinkedIn that their main priority was to strengthen [the company’s] financial health’ and that there was ‘a lot of work head of [them]’.
Prior to Litwin’s arrival, the company had declared bankruptcy in early 2023 as it was struggling to pay off its $1.7 billion debt. The procedure would allow them to negate nearly $1 billion in debt.
During that period, the company was able to keep most of its stores open, closing only a few dozen, according to financial documents.
Despite that, the company still had over $800 million in debt, which understandably strained their revenue.
Prior to the official announcement, news of the company’s impending shutdown had already started to spread among corporate employees.
Two weeks ago, Party City’s product development team was told to ‘return home immediately’ after their yearly trip with vendors was cancelled. At the time, they were told that the trip posed ‘a safety risk’ as the company had stopped paying its suppliers.
Around that same time, security from corporate headquarters locked the front entrance of the building. In a subsequent email, they told employees that ‘[they] would need to give a one-day heads up to gain access to the building’. They also warned not to let anyone without badge access to follow them inside the building.
Many employees were understandably frustrated at the lack of communication. They later learned from others that all store locations would be shutting down in February.
The Largest Party Supply Chain In the U.S.
Party City was established in 1986 and was the largest party supply store in the U.S. In 2021, the company had over 6,400 full-time and 10,00 part-time employees.
Despite their initial success, the company, which sells everything from costumes to balloons, eventually found themselves competing with big-box retailers such as Walmart, Amazon, and Costco.
They also struggled with rising costs due to the COVID-19 pandemic and a helium shortage.
