Party City Goes Out of Business

Ken Metral

20 Dec 2024 — 2 min read

Credit: Party City Holdco, Inc./Social Woodlands

Party City, the leading party supply retailer, announced on Friday that it will close all of its stores and initiate immediate corporate layoffs. The decision marks the end of an era for the New Jersey-based chain, which has faced mounting financial challenges in recent years.

The closure comes less than two years after Party City filed for bankruptcy protection in January 2023, burdened by $1.7 billion in debt. The company had managed to exit bankruptcy by September 2023 through a restructuring plan that wiped out nearly $1 billion in debt and shifted Party City to a privately held company. At the time, it retained a majority of its 800 U.S. locations.

CEO Barry Litwin, who assumed leadership in August 2023, informed employees during a corporate meeting that the company would begin the wind-down process immediately, describing the decision as the “most difficult message” he has ever delivered. Corporate employees were told that Friday would be their final day.

Rising Competition and Challenges

Party City has struggled to compete in a rapidly changing retail environment. Rising competition from seasonal giants like Spirit Halloween, which has expanded its reach into other holidays, and the growing dominance of online retailers added significant pressure. Even with efforts to adapt, such as offering products on Amazon in 2018, Party City failed to regain solid financial footing.

Litwin, known for his previous success as CEO of Global Industrial Company, had expressed optimism upon his appointment, citing opportunities to strengthen financial performance. However, external pressures and weakened in-store demand proved insurmountable.

Industry Shifts

The closure highlights broader challenges in the party goods and brick-and-mortar retail industry. Shoppers' shift toward e-commerce, coupled with economic uncertainty, has impacted foot traffic in physical stores. Meanwhile, companies like Spirit Halloween, known for their seasonal pop-ups, have capitalized on consumer demand for convenience and affordability.

What’s Next?

While Party City has not issued further public statements, the closure of all its stores leaves a gap in the party supply market. Consumers and employees alike face the ripple effects of this abrupt wind-down, signaling further shifts within the retail industry.

For now, Party City’s closure marks another chapter in the ongoing story of legacy retailers struggling to survive in a digital-first economy.

People Over Brands

A cultural and economic shift became undeniable in 2024: America has fallen out of love with brands and embraced people. Across politics, media, and business, individuals have overtaken logos, with loneliness serving as the driving force behind this change. The Loneliness Epidemic Let’s start with the problem: loneliness. * 12%

7 Funding Challenges & How to Solve Them

As we close out the year, many business owners are gearing up for growth in 2025. Whether it’s increasing sales, launching new products, or expanding teams, these plans often require growth capital. Yet, many businesses face common obstacles that prevent them from securing the funding they need. Here are

Tapestry: All-in-One News & Social App Launching 2025

In a world increasingly fragmented by multiple social media platforms and endless RSS feeds, a new app called Tapestry promises to simplify how users consume content online. Created by Iconfactory — the team behind the beloved third-party Twitter client Twitterific — Tapestry aims to bring news, blogs, and social media into a

Oura Ring Secures $200M, Valuation Soars to $5.2B

Oura, the smart ring maker, announced it has secured $200 million in a Series D funding round, bringing its valuation to $5.2 billion. The funding round included participation from Fidelity Management and glucose monitoring device maker Dexcom. Expansion Plans and AI Focus Oura says the new capital will be