Party City to close all stores by February

OUT OF BUSINESS

It was founded in 1986 and employs 16,000

Party City says in an internal letter that inflation and changes in consumer spending has forced it to shut its more than 700 stores. FRANKIE ALDUINO — THE NEW YORK TIMES

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By Aimee Ortiz, Melina Delkic and Hank Sanders

The New York Times

Party City, the party supply store that has provided the glittering backdrops for generations of birthday celebrations, New Year’s Eve bashes and Super Bowl gatherings, announced just days before Christmas that it was closing its doors for good.

Party City store managers were told that stores would begin a “wind-down process” that started Friday and would last until about Feb. 28. Store managers could keep their pay and benefits until then if they wanted to keep working, according to an internal letter reviewed by The New York Times.

Store employees said they were told that all stores in the United States would close by the end of February. CNN reported news of the company’s closing Friday.

Corporate employees and workers at a distribution center were told Friday that they would be laid off that day, according to an employee who shared a video of her being laid off.

The company said in a quarterly report filed with the Securities and Exchange Commission that it had 748 retail stores in North America. Founded in 1986 and employing more than 16,000 people, the chain party supply store sold balloons, costumes, accessories and other party goods.

It was not immediately clear how many stores would close in February. The total number of employees who were laid off Friday and how many would remain until the end of February was also not clear. Company representatives did not respond to requests for comment Friday.

The letter, on Party City Holdco letterhead, cited “inflationary pressures on costs and consumer spending” as some of the challenges that forced the company to close its doors.

Early Friday afternoon, there was still some foot traffic at the Party City on Atlantic Avenue in Brooklyn, New York, where employees were blowing up balloons and helping customers. The shelves were somewhat sparse, and holiday items were being sold at a discount: Christmas items, 50% off; New Year’s items, 20% off.

Melissa Ortiz, 29, was shopping for her son’s birthday party. “I normally come here when I do a little event,” she said, adding that the store usually had everything stocked and available at a “reasonable” price.

Employees at the store expressed shock at the news that the stores were closing, saying they had not been told anything. A manager declined to comment and directed questions to Party City’s corporate representatives.

The abrupt ending was in many ways a long time coming.

The New Jersey-based retailer filed for Chapter 11 bankruptcy protection in January 2023. It exited bankruptcy roughly one month after Barry Litwin became the struggling company’s president and CEO in August. The company’s bankruptcy canceled nearly $1 billion in debt, and it managed to keep a majority of its stores open.

Big Lots and Party City are the latest casualties of what has been a tough year for chain retailers, said Deborah Weinswig, the CEO of Coresight Research, an advisory and research firm that specializes in retail and technology.