Party City, the party and costume supply chain with more than 70 locations in California including several in Los Angeles, is shutting down operations immediately and laying off its employees.
In an online meeting Friday viewed by Bloomberg News, Party City Chief Executive Barry Litwin told corporate employees that it would be their last day of work. CNN reported that employees would not receive severance pay.
“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said in the video. The company will be “winding down” immediately, he said.
The chain, which has been in business for nearly 40 years and has around 700 locations, according to its website, could not handle a decrease in consumer spending triggered by everyday high prices, Litwin told employees.
Going-out-of-business sales began Friday, just 14 months after the company emerged from bankruptcy and four months after Litwin began as chief executive. The company filed for Chapter 11 bankruptcy in 2023 with about $1.8 billion in debt and emerged from the restructuring process under a plan meant to ensure its viability.
The company, however, continued to struggle and was considering reentering bankruptcy earlier this month, Bloomberg reported. The New Jersey retailer was falling behind on rent at some locations and running out of cash, according to the report.
Several retailers and fast-casual restaurant chains have struggled this year amid rising operating costs and inflation-wary consumers, including Big Lots, which is preparing to sell its stores, and Red Lobster, which filed for bankruptcy in May. Bricks-and-mortar locations in particular are scrambling to keep up with online retailers and big-box chains.
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