US Party City announced it will close its stores after 40 years in business
WOODCLIFF LAKE, NEW JERSEY (Times Media Service) Party City, the leading U.S. retailer specializing in party supplies, has announced it will cease operations and close all its stores after nearly 40 years in business. CEO Barry Litwin communicated this decision to employees during a video conference, stating that despite exhaustive efforts, the company could not overcome its financial challenges.
The company, which had approximately 6,400 full-time and 10,100 part-time employees as of 2021, has been significantly impacted by increased competition from big-box retailers and e-commerce platforms. These challenges were exacerbated by the COVID-19 pandemic, which led to lockdowns and a decline in celebratory gatherings, further affecting sales.
In January 2023, Party City filed for Chapter 11 bankruptcy protection, aiming to restructure and reduce its debt. The company secured $150 million in financing to maintain operations during this period. By September 2023, Party City emerged from bankruptcy, having canceled nearly $1 billion in debt, with plans to keep the majority of its approximately 800 U.S. stores open.
However, financial difficulties persisted. Between late 2022 and August 2024, the retailer closed more than 80 stores. In December 2024, reports indicated that Party City was preparing to file for bankruptcy for the second time in two years due to cash flow issues. On December 21, 2024, the company filed for Chapter 11 bankruptcy protection again, declaring assets and liabilities between $1 billion to $10 billion and over 10,000 creditors.
As part of the wind-down process, Party City plans to fulfill orders until New Year’s Eve, but staffing for 2025 remains uncertain. The closure of Party City reflects broader challenges in the retail sector, with industry predictions estimating that up to 45,000 brick-and-mortar stores could shut their doors in the next five years due to changing consumer behavior and rising costs.
Party City’s Canadian stores, owned by Canadian Tire, are not affected by the U.S. closures and will continue to operate.
Joel Patterson / Business Writer (Times Media Service)
