Party City will close all its stores and lay off corporate staff

Chile, it seems that Friday (December 20) was a DIFFICULT day in party city headquarters after an explosive announcement. Just days before the holidays, CEO Barry Litwin laid off all of the company’s corporate workers without severance pay. Because? After 40 years as the largest party supply store in the United States, Party City is closing all of its stores.

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Here’s why Party City is closing

According cnnIn a crushing video call, Party City’s CEO said the company is “going out of business.” Notably, operations were immediately suspended. Along with the layoffs, CEO Litwin informed corporate staff that their benefits would run out when the company closed. The human resources director reportedly burst into tears while explaining that part.

Despite “best efforts,” Litwin said Party City was unable to weather financial problems. As a result, the company collapsed and is no longer sustainable. This apparently occurred because the company was trying to combat inflation with higher prices. However, higher prices reduced customer spending.

“It’s really important for them to know that we’ve done everything we can to try to avoid this outcome,” Litwin said. “Unfortunately, it is necessary to start a liquidation process immediately.”

As mentioned, money has been PC’s biggest problem. Litwin joined the company as CEO four months ago, and a month after the company emerged from bankruptcy after filing in January 2023. At the time, Party City had about $1.7 billion in debt, and The bankruptcy state was responsible for around 1 billion dollars. However, remaining debt of more than $800 million put a dent in its 2024 earnings.

Employees suspect trouble after THESE company moves

CNN suggested that employees began to suspect something was brewing! Two weeks ago, Party City ordered its product development team to return home for safety reasons. The company had apparently stopped paying its foreign suppliers.

Additionally, all corporate employees were ordered to return home on December 10. The next day, Party City said in an email that employees would have to give a day’s notice to visit the office in the future.

Ultimately, however, employees claim PC left them in the dark about the company’s financial status. CEO Litwin addressed that on the video call. “We recognize that the flow of communication has not been the way we normally handle sensitive matters like this.” Litwin said.

What’s next for store employees?

CEO Litwin told CNN that the explosive message was the “most difficult” he has ever had to give.

But corporate employees weren’t the only ones embarrassed by the news Friday. CNN reports that some store employees also received letters about the business closing. Party City reportedly plans to close all stores and lay off those employees on February 28. Between 2022 and August 2024, the company closed more than 80 stores. Still, before this announcement, it had managed to keep more than 800 stores open.

“While Party City believes these closures are in the best interest of the company, we regret having to take this step and thank them for their valuable contributions and services to the company.” the letter supposedly said.

This week, another major retailer, Big Lots, announced it will also close more than 900 stores.

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