The party is coming to an end at Party City. The retailer, which emerged from a previous bankruptcy last year, has again filed for Chapter 11 bankruptcy.
The New Jersey-based company filed early Saturday in U.S. Bankruptcy Court for the Southern District of Texas. In the filing, Party City Holdings Inc. will “implement an orderly wind down of its business and liquidation of its assets.”
The company will put its assets up for bidding or, if there’s no sale, “initiate store closing sales to liquidate all of the Party City Group Companies’ retail and wholesale inventory and locations,” according to the filing.
Party City, which operated about 750 stores, had filed for Chapter 11 bankruptcy in January 2023 and emerged from the process in October 2023 with $1 billion less in debt. It also named a new CEO, Barry Litwin, who joined the company in August 2024.
But the retailer evidently didn’t emerge on solid enough financial footing. Bloomberg recently reported the company was considering a sale or second bankruptcy.
In its bankruptcy filing Saturday, Party City reported assets of between $1 billion to $10 billion, along with liabilities of $1 billion to $10 billion – the company said it has between 10,000 and 25,000 creditors.
Litwin told corporate employees in a meeting Friday that Party City is “winding down” operations immediately and that today will be their last day of employment, CNN reported Friday.
USA TODAY has reached out to Party City to confirm its plans.
“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said on the videoconference call, which CNN reported it watched. Party City’s “very best efforts have not been enough to overcome” its financial challenges, Litwin said, according to CNN.
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Like many other retailers, Party City marked down prices in September – on more than 2,000 items by an average of 20% – to attract skittish customers and drive sales. “Consumers continue to feel pressure on their budgets in an environment of uncertainty, sometimes making joyous occasions feel stressful due to affordability,” Litwin said at the time.
Still, several stores had reported closures in recent months, including those in Topeka, Kansas, and Wichita Falls, Texas.
Party City had 18 confirmed closings, with one more planned closing in 2024, according to Coresight Research. That comes after 65 confirmed closures in 2023, the research firm says.
Other retail chains have faltered, too, recently, with Macy’s last week announcing accelerated store closures and Big Lots, which announced earlier this week that it would go out of business.So far this year, there have been 7,327 store closings and 5,919 openings in the U.S., according to Coresight Research. That far outpaces closures in 2023, when the research firm tracked 5,473 closings (and 5,751 openings) – and is the highest number of store closures since 2020 when the pandemic shutdown of physical stores and the resulting fallout caused mass closures, Coresight Research CEO Deborah Weinswig told USA TODAY.
“We started off 2024 believing this was going to be a strong year with store openings outpacing closings. However, 2024 has proven to be a challenging year for brick-and-mortar retailers,” she said.
“Consumers have little patience for long lines, out of stocks, and poorly merchandised stores. Party City has suffered from all three of these issues and has paid the ultimate price,” Weinswig said.
In October 2024, several former Party City employees filed a class action lawsuit against the company over September layoffs, alleging that they were not given the legally required notice before their positions were abruptly terminated.
The state of New Jersey had promised Party City a $10 million tax break in 2021 when it moved its headquarters to Woodcliff Lake, an affluent Bergen County suburb just south of the border with New York State.
However, after the company declared bankruptcy state officials said the company hadn’t yet gotten any funds from tax breaks and wouldn’t until it proved it had created the jobs as promised.
Contributing: Katie Landeck, Keishera Lately, Saleen Martin and Lynn Walker, USA TODAY Network.
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This article originally appeared on USA TODAY: Party City closing: Company files for second bankruptcy in two years
