Party City, a beloved party supply store for nearly four decades, announced its permanent closure just days before Christmas, leaving employees without jobs and customers without their go-to celebration destination.
At a Glance
- Party City is closing all its stores permanently, with over 70 locations shutting down in California alone
- The wind-down process began on a Friday and will continue until February 28, 2025
- Employees were laid off without severance pay or continued benefits
- The closure comes just 14 months after emerging from bankruptcy, citing decreased consumer spending and high everyday prices
- Party City operated over 800 stores in North America and employed more than 16,000 people
End of an Era for Party City
After nearly 40 years of providing the backdrops for countless celebrations, Party City is closing its doors for good. The company, which specialized in selling party supplies like balloons, costumes, and accessories, announced the shutdown of all its U.S. locations just days before Christmas. This unexpected move has left both employees and loyal customers reeling from the loss of a staple in the party supply industry.
The closure affects over 800 stores across North America, including more than 70 locations in California. Party City’s CEO, Barry Litwin, delivered the news to corporate employees in an online meeting, describing it as “without question the most difficult message that I’ve ever had to deliver,” Litwin said.
Party City is closing down all of its stores, ending nearly 40 years in business. The chain joins a growing list of retailer bankruptcies this year as customers cut back on discretionary spending amid the rising cost of living. https://t.co/4PreZg4T3s
— KEZI 9 NEWS (@KEZI9) December 20, 2024
Financial Struggles and Layoffs
Party City’s demise comes on the heels of significant financial struggles. The company filed for Chapter 11 bankruptcy protection in January 2023, burdened with $1.8 billion in debt. Despite attempts at restructuring and emerging from bankruptcy, the retailer couldn’t overcome the challenges posed by decreased consumer spending, high everyday prices, and increased competition from online shopping platforms.
The closure process, described as a “wind-down,” began on a Friday and is set to continue until February 28, 2025. Corporate employees and distribution center workers were laid off immediately upon the announcement, with no severance pay or continued benefits. Store managers, however, can retain their pay and benefits if they continue working until the closure date.
Impact on Employees and the Retail Landscape
The sudden closure has left more than 16,000 employees facing an uncertain future. CEO Barry Litwin attempted to soften the blow, stating, “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. However, the lack of severance and abrupt nature of the layoffs has left many workers feeling betrayed and unprepared for the sudden loss of income.
Party City’s downfall is not an isolated incident in the retail sector. Other retailers and restaurant chains are also grappling with rising costs and inflation, including Big Lots and Red Lobster. This trend signals persistent challenges for physical retail stores under financial pressure, especially in the face of changing consumer habits and the rise of e-commerce.
