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Party City, the nation’s largest party supply retailer, announced the immediate shutdown of all its locations, marking the end of an era for the nearly 40-year-old company. CEO Barry Litwin informed employees during a corporate meeting on Friday that the company is “winding down” operations, and today will be their final day of employment.

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“This is without a doubt the most difficult announcement I’ve ever had to make,” Litwin shared via video conference. He cited persistent financial challenges as the primary reason for the company’s collapse, despite efforts to stabilize operations. “Our very best efforts were not enough to overcome these challenges,” he said.

Bankruptcy and Failed Recovery Efforts

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Party City initially filed for bankruptcy in January 2023, burdened by a staggering $1.7 billion in debt. As part of its restructuring plan, the company canceled nearly $1 billion in debt and shuttered less-profitable stores. However, the financial strain proved insurmountable, as rising operational costs and declining consumer spending continued to hurt the company’s bottom line.

The company’s challenges were compounded by increased competition from online retailers like Amazon and seasonal competitors like Spirit Halloween. Additionally, the lingering impact of the COVID-19 pandemic and a global helium shortage disrupted Party City’s critical balloon sales, further impacting its earnings.

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After emerging from bankruptcy in September 2023, Party City still faced over $800 million in debt. Recent financial disclosures revealed that net sales had fallen to $407 million for the quarter ending in September 2023, a significant drop from $502 million during the same period in 2022.

Broader Retail Struggles

Party City joins a growing list of retailers closing their doors this year amid economic pressures and shifting consumer habits. The chain’s downfall reflects broader challenges in the retail industry, with major chains on track to close more stores in 2024 than in any year since 2020, according to Coresight Research.

The once-iconic chain employed approximately 16,500 workers across its full- and part-time workforce as of 2021. Many of those employees had hoped the company’s restructuring would lead to long-term recovery. However, Litwin confirmed that efforts to renegotiate leases and streamline operations ultimately fell short.

Despite its struggles, Party City remained a household name for decades, serving as the go-to destination for balloons, costumes, and party supplies. Its closure marks a significant loss for customers and communities that relied on its stores for celebrations and special occasions.

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