Party City, the party and costume supply chain with more than 70 locations in California, including several in Los Angelesimmediately halts operations and dismisses its employees.
In an online meeting viewed by Bloomberg News on Friday, Party City Chief Executive Barry Litwin told company employees that this would be their last day on the job. CNN reported that employees would not receive severance pay.
“That’s hands down the hardest message I’ve ever had to deliver,” Litwin said in the video. The company will be “scaled down” immediately, he said.
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The chain, which has been around for nearly 40 years and has about 700 locations according to its website, cannot handle a drop in consumer spending due to daily high prices, Litwin told employees.
The sale of the company’s operations began Friday, just 14 months after the company emerged from bankruptcy and four months after Litwin started as CEO. The company filed for Chapter 11 bankruptcy in 2023 with debt of about $1.8 billion and emerged from the restructuring process with a plan designed to ensure its viability.
However, the company continued to struggle and considered re-entering bankruptcy Earlier this month, Bloomberg reported. According to the report, the New Jersey retailer fell behind on rent in some locations and ran out of cash.
Several retailers and fast-casual restaurant chains have struggled this year with rising operating costs and inflation-conscious consumers, including Big Lotthat is preparing to sell its stores, and Red Cancerwhich filed for bankruptcy in May. Physical locations in particular are trying to keep up with online retailers and big-box chains.
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This story originally appeared in the Los Angeles Times.
