Party City announced that it will shutter all stores, a move which ends the nearly 40-year history of the company and comes almost two years after it declared bankruptcy.
Corporate employees of the party supplies retailer learned Friday that they would lose their jobs immediately, according to a report from CNN.
Party City CEO Barry Litwin told the employees during a video conference call that the company was “winding down.”
“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said at the meeting.
“It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome,” he added. “Unfortunately, it’s necessary to commence a winddown process immediately.”
Litwin said the “very best efforts” of the company were ultimately not “enough to overcome” its financial issues.
He mentioned inflation as a factor which impacted consumer spending and increased costs for the business.
Corporate staffers will not receive severance pay and their benefits will immediately end, per CNN.
Some employees at Party City stores meanwhile received letters saying their stores would be closed at the end of February. They will lose their jobs at that point.
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“Although Party City believes these closings are in the best interest of the company, we regret that we have had to take this step and thank you for your valued contributions and service to the company,” the document said.
Party City declared bankruptcy in January 2023 after battling to pay down $1.7 billion in debt.
They were able to keep most of their 800 stores operating through that process, as well as cancel almost $1 billion of the debt load.
Many employees complained about minimal transparency from Party City leadership in recent weeks, a reality for which Litwin apologized.
“We recognize the flow of communication has not been how we typically handle sensitive matters like this,” Litwin said during the call.
A former corporate employee who spoke to CNN said the product development team at Party City was called back from an annual outing with vendors because the company stopped paying its suppliers.
Every corporate staff member lost access to the office on Dec. 10, with security personnel locking the doors.
Staff were told one day later via email that they had to request access to the building a day beforehand if they wanted to enter.
They were told to “not allow anyone to tailgate when entering the building,” meaning they should not let anyone follow closely while they use a company badge to open the door.
Party City had 6,400 full-time and 10,100 part-time workers as of 2021, according to CNN.
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