Party City to Shut Down All of Its Stores After Nearly 40 Years: ‘We’ve Done Everything Possible,’ Says CEO

CEO Barry Litwin told employees that operations would be “winding down” immediately, according to a CNN report

Party City will be closing all of its stores, ending nearly 40 years in business, CNN reported on Friday.

The news comes just months after the New Jersey-based company exited bankruptcy in September.

According to CNN, CEO Barry Litwin broke the news during a meeting with his corporate employees on Friday, Dec. 20 telling them that Party City is “winding down” operations immediately and that Friday will be their last day of employment. Staff were reportedly told they will not receive severance pay, and that their benefits would end as the company goes out of business.

“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said at the video conference call meeting, which was viewed by the outlet.

Litwin went on to explain that Party City’s “very best efforts have not been enough to overcome” its financial challenges. He also pointed out that the company struggled to compete with inflation, which drove its costs higher and dragged down consumer spending.

“It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome,” Litwin said. “Unfortunately, it’s necessary to commence a wind down process immediately.”

Party City did not immediately reply to PEOPLE’s request for comment.

Per CNN, corporate employees sensed the company’s pending doom and news about its possible end started to trickle out over the past few weeks. A former Party City corporate employee, who wished to remain anonymous, revealed that the company’s product team was recalled from its annual trip with vendors and told to return home immediately.

According to the anonymous source, the team was told the company believed the trip posed a safety risk, because Party City had stopped paying its suppliers.

Other signs of the company’s pending closure involved a Dec. 10 incident where employees were sent home and security locked the front entrance of company headquarters. A Dec. 11 email to employees stated that they needed to provide a one-day heads up to gain access to the building.

CNN also obtained internal Microsoft Teams chats which revealed that employees were frustrated with the company’s lack of communication as word spread about the product team’s recalled business trip.

Other employees also became furious when they learned about notifications that were sent out to store managers that stated that Party City stores would be shut down on February 1, 2025.

During the call with staff on Friday, Litwin apologized for the lack of communication. “We recognize the flow of communication has not been how we typically handle sensitive matters like this,” he said.

Karen McGowan, Party City’s chief human resources officer, reportedly broke down in tears several times during the video conference call.

“I certainly know this is a lot to take in,” McGowan said. “My apologies.”

Party City is the largest party supply store in the United States. The company had approximately 6,400 full-time and 10,100 part-time workers as of 2021. It is best known for selling Halloween costumes, balloons, holiday decor, and party supplies for all occasions. 

The chain joins a growing list of retailer bankruptcies this year, including Big Lots, which filed for Chapter 11 bankruptcy on Sept. 9.