the staff of the Ridgewood blog
Paramus NJ, after almost four decades as the go-to retailer for celebrations, Party City is closing its doors for good. The iconic party supply chain announced it is winding down operations effective immediately, with all stores set to close by February 28.
The End of an Era
In a company-wide video conference on Friday, CEO Barry Litwin broke the news to corporate employees, describing it as the most difficult message of his career. Employees were informed they would not receive severance pay, and their benefits would end as the company ceases operations.
“Despite our very best efforts, we could not overcome the financial challenges,” Litwin said, citing inflation and reduced consumer spending as key contributors to the company’s collapse.
The Road to Closure
Party City’s financial struggles have been well-documented. The company filed for bankruptcy in January 2023, eliminating nearly $1 billion in debt but still carrying an $800 million burden. Efforts to remain afloat included store closures and cost-cutting measures, but they were insufficient to revive the retailer.
Over the years, Party City faced growing competition from e-commerce giants like Amazon, pop-up retailers such as Spirit Halloween, and big-box stores like Walmart and Costco. The pandemic added further challenges, with rising costs and a helium shortage impacting its core balloon business.
Emotional Fallout for Employees
The announcement shocked employees, many of whom were unaware of the company’s dire financial state. Recent town hall meetings had projected optimism, leaving staff blindsided by the sudden closure. Corporate employees were sent home earlier this month, and security measures were tightened at headquarters.
During Friday’s call, Chief Human Resources Officer Karen McGowan became emotional as she detailed the loss of benefits and severance, apologizing for the lack of earlier communication.
A Broader Trend in Retail
Party City’s closure is part of a larger wave of retail bankruptcies in 2024. Rising costs of living and reduced discretionary spending have forced several major chains, including Big Lots, to shut down operations. Industry analysts predict this year will see the highest number of store closures since 2020.
What’s Next?
As Party City bows out, customers may see liquidation sales as stores prepare to close by February 28. The closure marks the end of an era for a brand that once dominated the party supply market, leaving behind fond memories for millions of customers.
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