Party City, a party supply retailer with nearly 40 years of history, is going out of business and closing all of its stores. The company filed for Chapter 11 bankruptcy in January 2023 due to overwhelming debt of about $1.7 to $1.8 billion and financial struggles exacerbated by inflation, reduced consumer spending, and competition from online retailers and seasonal pop-up stores. Although it emerged from bankruptcy in late 2023 after eliminating nearly $1 billion in debt, Party City could not recover fully and announced in December 2024 that it was "winding down" operations immediately, laying off employees without severance pay, and beginning going-out-of-business sales. The closure affects around 700 stores nationwide and ends the company's retail and wholesale operations after nearly four decades

. Key reasons for the closure include:

• Heavy debt burden and unsuccessful restructuring efforts
• Inflation driving up costs and lowering consumer discretionary spending
• Competition from larger retailers like Walmart and Amazon, and seasonal competitors like Spirit Halloween
• Impact of the COVID-19 pandemic, which reduced demand for party supplies during lockdowns

The CEO Barry Litwin described the closure as the most difficult message he had to deliver, emphasizing that despite the company's best efforts, the financial challenges were insurmountable