[Party City is closing all of its stores, ending nearly 40 years in business. CEO Barry Litwin told corporate employees Friday that the company is “winding down” operations immediately and that today will be their last day of employment. Employees will not receive severance pay, and their benefits will end as the company goes out of business.
Party City’s financial struggles date back to 2022, when the company filed for bankruptcy and was able to cancel nearly $1 billion in debt. However, the company still had more than $800 million in debt to overcome, which strained its earnings this year.
The company’s struggles intensified in 2023, as it contended with inflation, which sent its costs higher and decreased consumer spending. Despite its efforts to strengthen its financial health, Party City was unable to overcome its challenges and is now winding down its operations.
Employees were informed of the decision Friday, and some received letters stating that their stores would be closed on February 28, at which point they would be terminated. The company’s Chief Human Resources Officer broke down in tears on a video conference call as she discussed the details of the employee’s benefits and severance.
Party City is the largest party supply store in the United States, with approximately 6,400 full-time and 10,100 part-time workers as of 2021. The company’s closure is the latest in a growing list of retailer bankruptcies this year, as customers cut back on discretionary spending due to the rising cost of living.
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