- Party City, a leader in party supplies for nearly 40 years, is closing over 700 stores by February 1st.
- The company faces insurmountable financial challenges, including over $800M in debt, sluggish sales, and rising costs.
- Party City’s closure reflects a broader trend of retail downsizing, with over 7.1K store closures announced in 2024.
Party City, a household name in party supplies, is shutting down all operations after 39 years in business, as reported by Bisnow.
End of An Era
CEO Barry Litwin informed employees last week that the company is “winding down” immediately, with Friday marking the last day of business for corporate staff.
Litwin assured employees that every effort had been made to avoid closure but emphasized that the winddown was necessary given Party City’s circumstances. Employees were not offered severance pay, underscoring the severity of the company’s financial difficulties.
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Finally Going Bankrupt
Party City’s financial troubles have been mounting for years. After exiting its first bankruptcy in September 2023, the company shed nearly $1B of its $1.7B debt but remained burdened with over $800M in liabilities.
The company’s recovery was hindered by sluggish sales, increasing operational costs, and a helium shortage that significantly impacted its balloon business—a key revenue driver (if you can believe it).
Efforts to streamline operations included closing over 80 stores between late 2022 and mid-2024, but these measures weren’t enough to stabilize the business. By December 2024, Party City was considering a second bankruptcy before ultimately deciding to wind down operations.
The Bigger Picture
Party City’s closure is part of a larger wave of retail shutdowns in 2024. According to research firm CoreSight, 7.1K store closures were announced nationwide by November 2024, up 69% from the previous year.
Retailers across various sectors have been grappling with rising costs, shifting consumer preferences, and a challenging macroeconomic environment. Party City’s struggles underscore the difficulties traditional retailers face in adapting to these trends.
What’s Next?
Party City’s 700-plus stores will close by February 1, 2025, marking the end of an era for the iconic retailer. Its closure leaves a significant gap in the party supply market and raises questions about the future of specialty retail in an evolving economic landscape.
