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 on Friday and would last until about Feb. 28, 2025. 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 on Friday.
Corporate employees and workers at a distribution center were told on 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 on Friday and how many would remain until the end of February was also not clear. Company representatives did not respond to requests for comment on 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 on Friday afternoon, there was still some foot traffic at the Party City on Atlantic Avenue in Brooklyn, 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 percent off; New Year’s items, 20 percent 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 chief executive 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 chief executive of Coresight Research, an advisory and research firm that specializes in retail and technology.
This year alone, U.S. retailers announced 7,327 store closures and 5,919 store openings, according to a Coresight Research report. Compared with last year, major U.S. retailers have announced nearly 58 percent more closures. Other chains that have closed this year include 99 Cents Only, Advance Auto Parts, American Freight and Conn’s HomePlus.
“This is the highest number of store closures seen since 2020, when the pandemic shutdown of physical stores and the resulting fallout caused mass closures,” Ms. Weinswig said.
“A lot of the store closures occurring this year are the result of companies like Shein, Temu and Amazon snapping up consumer dollars by making shopping easier and more affordable,” she said.
Despite cooling, inflation has hit consumers — even wealthier ones — hard, Ms. Weinswig said, and retailers know that their customers are looking for ways to save.
“Prices at the grocery store are still high, and across all product categories consumers are willing to trade down to store brands or discount retailers to save money,” she said.
At the Party City in Brooklyn on Friday, Liyah Thompson, 35, said she was buying decorations for her daughter’s 13th birthday. She was surprised to learn that Party City stores were closing. Once they closed, she guessed she might shop at Target or Dollar Tree instead.
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