The party is coming to an end in Party City. The retailer, which emerged from an earlier bankruptcy last year, has filed for another Chapter 11 bankruptcy.
The New Jersey-based company filed a complaint early Saturday in the U.S. Bankruptcy Court for the Southern District of Texas. In the filing, Party City Holdings Inc. “implement an orderly wind-down of its activities and liquidation of its assets.”
The company will put its assets up for auction or, if no sale occurs, “initiate store closures to liquidate all retail and wholesale inventories and locations of the Party City Group Companies,” the filing said.
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 appointed a new CEO, Barry Litwin, who joined the company in August 2024.
But the retailer apparently did not have a sufficiently solid financial basis. Bloomberg recently reported that the company is considering a sale or a second bankruptcy.
In Saturday’s bankruptcy filing, Party City reported assets between $1 billion and $10 billion, along with debts of $1 billion to $10 billion. The company said it has between 10,000 and 25,000 creditors.
Litwin told company employees at a meeting Friday that Party City is “winding down” operations immediately and that today will be their last day on the job, CNN reported Friday.
USA TODAY contacted Party City to confirm its plans.
“That is without a doubt the hardest message I have ever had to deliver,” Litwin said during the video conference, which was viewed by CNN. Party City’s “farthest efforts have not been enough to overcome the financial challenges,” Litwin said, according to CNN.
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Like many other retailers, Party City cut prices in September – by an average of 20% on more than 2,000 items – to attract wary customers and boost sales. “Consumers continue to feel pressure on their budgets in an environment of uncertainty, making joyful occasions sometimes 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.
According to Coresight Research, Party City had 18 confirmed closures, with one more planned in 2024. That follows 65 confirmed closures in 2023, the research firm says.
Other retail chains have also failed lately, with Macy’s announcing accelerated store closures last week and Big Lots announcing it would go bankrupt earlier this week. 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 recorded 5,473 closures (and 5,751 openings) – and is the highest number of store closures since 2020, when the pandemic closure of brick-and-mortar stores and the resulting fallout caused mass closures, according to Coresight Research CEO Deborah Weinswig told USA TODAY.
“We entered 2024 with the belief that this would be a strong year, with store openings outpacing closures. However, 2024 has proven to be a challenging year for brick-and-mortar retailers,” she says.
“Consumers have little patience for long lines, sold out inventory and poorly sold stores. Party City has suffered from all three of these problems and 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, claiming 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 suburb of Bergen County just south of the New York state border.
However, after the company declared bankruptcy, government officials said the company had not yet received any money from tax breaks and would not do so until it was proven it had created the promised jobs.
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 shutdown: Company files for second bankruptcy in two years
