Party City going out of business
The party is apparently over for Party City.
Party City Holdco Inc. on Saturday said that it plans to commence a "wind down" of its retail and wholesale operations and will hold going out of business sales at its approximately 700 stores nationwide. In conjunction with the wind down, the company has filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. The retailer encouraged shoppers to take advantage of deals and discounts at its stores "while supplies last."
In a statement, Party City said that, as with many other retailers, "macroeconomic headwinds" more recently proved too severe for it to overcome. The news about Party City comes days after Big Lots said it is preparing to start "going out of business" sales at all of its remaining store locations in the coming days after the apparent collapse of its deal with Nexus Capital Management.
"The decision was made following exhaustive efforts by the company to find a path forward that would allow continued operations in an immensely challenging environment driven by inflationary pressures on costs and consumer spending, among other factor," Party City said in a statement.
Party City’s demise is the culmination of a troubled two years for the retailer. In January 2023, the company filed for Chapter 11 bankruptcy amid lower sales, ongoing supply problems and liquidity problems. That September, the U.S. Bankruptcy Court for the Southern District of Texas approved the company’s restructuring plan, which “substantially strengthened its capital structure by eliminating nearly $1 billion in debt, enhanced its liquidity and optimized its Party City store portfolio” by negotiating improved lease terms and closing less productive stores.
Based in Woodcliff Lake, N.J., Party City Holdco operates 700 company-owned and franchise store locations across North America. It also operates Amscan, a premier designer, manufacturer, and distributor of celebration products including décor, tableware, costumes and accessories.
In a corporate video meeting viewed by CNN, Party City CEO Barry Litwin, told employees that "it's really important for you to know that we’ve done everything possible that we could to try to avoid this outcome." Litwin took the reins of Party City in August 2024, succeeding Sean Thompson, who was named interim CEO following the departure of Brad Weston who resigned shortly after the bankruptcy exit.
[READ MORE: Party City exits bankruptcy, CEO to step down]
CNN reported that Party City employees were caught off guard by the closure news as management hadn’t mentioned any potential financial trouble at recent town hall meetings.
On the call with corporate staff Friday, Litwin apologized for the lack of communication.
“We recognize the flow of communication has not been how we typically handle sensitive matters like this,” he said.
