Party City, an iconic retail brand that has helped people celebrate milestones for 40 years, is going out of business.
In filing for Chapter 11 bankruptcy, the company stated it would “wind down” its retail and wholesale business in anticipation of closing nearly 700 stores.
“The decision was made following exhaustive efforts by the company to find a path forward that would allow continued operations in an immensely challenging environment driven by inflationary pressures on costs and consumer spending, among other factors,” Party City said in the statement.
Party City originally filed for bankruptcy in early 2023, restructuring $1 billion in debt but still unable to lift its head above water.
CEO Barry Litwin stated, “Consumers continue to feel pressure on their budgets in an environment of uncertainty, sometimes making joyous occasions feel stressful due to affordability,” said Litwin in a previous announcement.
It’s the largest retailer of party goods in North America but faced increased competition from Amazon, Walmart, Target, and seasonal pop-up stores.
The company’s demise comes during a particularly challenging period for brick-and-mortar retail, with more than 7,100 store closures announced through November 2024, marking a 69% increase from the previous year. The closure represents a significant shift for a company that once generated peak revenue of $2.4 billion in 2018 and commanded over 6% market share in the gift shop industry.
Analysts at UBS project the retail sector’s challenges could lead to as many as 45,000 store closures over the next five years, as retailers grapple with changing consumer habits, rising operational costs, and the continued growth of e-commerce.
–Dwight Widaman