Popular Retail Store is Closing All Corporate Owned Locations

Party City is shutting down all its stores, marking the end of its nearly 40-year run, according to information obtained by CNN.

In a Friday meeting with corporate employees, CEO Barry Litwin announced that the company is beginning an immediate shutdown process. Employees were informed that this would be their final day of work and that they would not receive severance packages. Additionally, their benefits will be terminated as the company ceases operations.

“That is without question the most difficult message that I’ve ever had to deliver,” CEO Litwin said at a video conference call meeting.

Litwin stated that despite Party City’s best efforts, the company couldn’t overcome its financial difficulties, ultimately leading to its collapse. He explained that rising inflation increased operational costs while simultaneously reducing consumer spending. On Friday, some store employees were notified in writing that stores would officially close on February 28, and their employment will end.

“It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome,” Litwin said. “Unfortunately, it’s necessary to commence a winddown process immediately.”

“Although Party City believes these closings are in the best interest of the company, we regret that we have had to take this step and thank you for your valued contributions and service to the company,” the letter said.

As of late October, Party City operated over 700 company-owned and franchised stores across North America, according to a press release issued that month.

The company has reportedly faced challenges stemming from inflation, debt, and other factors.

This development reportedly comes nearly 40 years after Party City’s founding and about 14 months after emerging from bankruptcy. Per Fox News, upon completing its Chapter 11 bankruptcy process last year, the company announced it had “significantly improved its financial position by eliminating nearly $1 billion in debt, enhancing liquidity, and optimizing its store portfolio through renegotiated lease terms and the closure of underperforming locations.”

During the bankruptcy process, Party City converted its debt into equity shares owned by its lenders. The company was delisted from the New York Stock Exchange in January 2023, ending an eight-year run on the exchange.

Speculation about the retailer considering another bankruptcy filing emerged last week.

While all corporate-owned Party City stores are closing, a few dozen independently-owned locations will continue to operate.

“Local Party City franchisees are not affected by the bankruptcy,” Mitesh Patel, a franchisee from Austin, Texas, told FOX Business. “There are a total of 29 franchise stores who will have their stores open and ready to continue serving their local communities.”