The mood at Party City was far from festive Friday, as CNN reported that the retailer will abruptly shut down its stores and let all employees go at the end of the day, ending a run of nearly 40 years.
Party City specialized in items such as balloons, Halloween costumes, and party goods, and CNN noted that it faced competition from big-box retailers like Amazon, Costco, and Walmart, as well as ecommerce sites and pop-up initiatives like Spirit Halloween.
The company had roughly 6,400 full-time employees and 10,100 part-time workers as of 2021, according to CNN.
Barry Litwin took the reins as president and CEO in August, and Party City emerged from bankruptcy in September, CNN reported, adding that the company declared bankruptcy in January 2023, helping it to cancel nearly $1 billion in debt and keep the doors open at most of its 800-plus locations, but it was still saddled with more than $800 million in debt.
CNN viewed a meeting with Party City employees via videoconference during which Litwin said inflation caused costs to rise and sales to decline and apologized for the lack of communication leading up to Friday’s events, while chief human resources officer Karen McGowan tearfully broke the news that employees would not receive severance pay and their benefits would come to an end.
Rank-and-file employees would not have known that the writing was on the wall, but CNN reported that Party City recalled its product development team from its annual vendor trip earlier this month over safety concerns because the company had halted payments to suppliers, adding that corporate employees were sent home from its headquarters in Woodcliff Lake, N.J., Dec. 10 and told that they were required to provide one day’s notice if they wished to access the building.
Friday’s news capped a tough week for retail, as discount chain Big Lots announced Thursday that a sale of the company was scuttled, and it would close its 963 stores.
