LOS ANGELES — For close to four decades, Party City has been a favored destination for Halloween costumes, birthday party supplies, and festive decorations for occasions like New Year’s Eve. However, this long-standing retailer is now in the process of closing many of its stores.
On Saturday, Party City declared that it would initiate a “wind down” of both its retail and wholesale operations while preparing to close nearly 700 locations across the country. In conjunction with this announcement, the company has filed for Chapter 11 bankruptcy protection for the second time in under two years, asserting that the move is intended to “maximize value for the benefit of the company’s stakeholders.”
The company explained that this decision was reached after extensive efforts to establish a sustainable path amid significant challenges, including rising inflation affecting costs and consumer spending.
Party City had previously filed for Chapter 11 bankruptcy protection in January 2023, which resulted in a restructuring that allowed the company to reduce its debt by nearly $1 billion. However, the latest economic pressures have proven too challenging to navigate successfully.
With the impending closures, Party City indicated it would retain over 95% of its approximate 12,000 employees to assist in the winding down process.
In recent years, Party City has encountered escalated competition from major retailers such as Walmart and Target, as well as seasonal pop-up stores like Spirit Halloween, which has also revealed plans to open 10 Spirit Christmas stores this October. This competition has become increasingly intense at a time when prices are on the rise, including helium costs for balloons, and consumer demand is waning.
The competitive landscape has affected other retailers as well; just last week, discount store Big Lots announced it would commence going-out-of-business sales across its remaining outlets after a potential sale of the company did not materialize. In line with its own challenges, Party City’s website is currently displaying discounts of up to 50% as part of its liquidation process.