Party City, a party costume supply chain with more than 70 stores in California, including several in Los Angeles, is immediately shutting down operations and laying off employees.
In a Friday online conference viewed by Bloomberg News, Party City CEO Barry Litwin told company employees that today would be their last day on the job. CNN reported that the employees will not receive severance pay.
“This is definitely the most difficult message I’ve ever had to convey,” Litwin said in the video. The company said it plans to “wind down operations” immediately.
The chain, which has been in business for nearly 40 years and has about 700 stores, according to its website, can’t keep up with declining consumer spending due to daily high prices, Litwin told employees.
The going-out-of-business sale began Friday, just 14 months after the company emerged from bankruptcy and four months after Mr. Litwin became chief executive. The company filed for Chapter 11 bankruptcy in 2023 with approximately $1.8 billion in debt and emerged from the restructuring process with a plan to ensure its viability.
However, the company continues to struggle and is considering filing for bankruptcy again earlier this month, Bloomberg reported. The New Jersey-based retailer was behind on rent at some of its stores and was short on cash, the report said.
Several retailers and fast-casual restaurant chains, including Big Lots, which is preparing to sell stores, and Red Lobster, which filed for bankruptcy in May, have faced rising operating costs and consumers wary of inflation this year. I am struggling inside. Brick-and-mortar stores in particular are working hard to catch up with online retailers and big chains.
