Los Angeles — For nearly 40 years, customers have flocked to Party City for Halloween costumes, children’s birthday party favors, New Year’s Eve festive decorations, and more. Now, the go-to store for everything from cartoon-themed balloons to Super Bowl decorations is closing its doors.
Party City announced Saturday that it would begin “winding down” its retail and wholesale operations in preparation for closing about 700 stores nationwide. The company also filed for Chapter 11 bankruptcy protection for the second time in less than two years “to maximize value for the benefit of the company’s stakeholders.”
“This decision reflects the company’s intensive efforts to find a path forward that allows for business continuity in an extremely difficult environment driven by inflationary pressures on costs and consumer spending, among other things,” Party City said in a statement. It was handed down at the end of the process.”
Party City also filed for Chapter 11 bankruptcy protection in January 2023. The move enables a restructuring that eliminates nearly $1 billion in debt. However, “recent macroeconomic headwinds have proven too strong” to overcome, the company said.
The New Jersey-based retailer said it would retain more than 95% of its 12,000 employees to help with the closure process.
Party City faces increasing competition from Walmart and Target, as well as event-based pop-up stores such as Spirit Halloween, which also announced in October that it would open 10 Spirit Christmas stores. The pressure has intensified at a time of rising prices and weak consumer demand for materials such as helium, which is used in party balloons.
The competition is also hurting other retailers, with discount chain Big Lots announcing last week that it would launch a going-out-of-business sale at its remaining stores after the company’s sale did not materialize. Party City’s website similarly offers going-out-of-business discounts of up to 50% on the entire store assortment.
