Party City is closing down all of its stores
After relentless efforts to stay afloat, Party City has officially announced that it will be closing its doors due to overwhelming financial challenges. CEO Barry Litwin explained that despite the company’s best attempts, the ongoing difficulties have proven insurmountable.
“We’ve exhausted every possible avenue to avoid this outcome,” Litwin remarked. “However, we must now begin the process of winding down operations immediately.”
Bankruptcy and Debt Crisis
The New Jersey-based retailer, known for its vast selection of party supplies, was already grappling with financial woes when Litwin was appointed CEO just four months ago. Upon taking the role, Litwin expressed the company’s focus on strengthening its finances, with a clear acknowledgment that substantial work lay ahead.
Party City entered bankruptcy in January 2023, burdened by an enormous $1.7 billion debt. By filing for bankruptcy, the company was able to shed nearly $1 billion in debt, which helped keep most of its 800+ stores open. However, despite these efforts, the company continued to struggle with more than $800 million in debt, which severely impacted its earnings in 2024.
Struggling Against Rising Competition
As the largest party supply retailer in the U.S., Party City once thrived in the market. But intense competition from e-commerce giants like Amazon and Walmart, as well as pop-up stores like Spirit Halloween, took a toll on its business. Additionally, challenges like the global helium shortage during the pandemic hurt its balloon sales, a key revenue source for the company.
Industry-Wide Retail Struggles
Party City’s collapse is part of a larger trend in the retail sector, where numerous companies are facing financial distress. The rise of online shopping, combined with changing consumer habits, has made it increasingly difficult for traditional brick-and-mortar stores to survive.
In fact, Party City is not alone. Major retailers, including Big Lots, have also announced closures or “going out of business” sales in the wake of similar struggles. Coresight Research predicts 2024 will see the highest number of store closures since 2020, as more retailers succumb to the pressures of rising costs and shifting consumer behavior.
