Party City is closing stores after nearly four decades of business.

The company announced on Dec. 21 that it would start a “wind down” of its retail and wholesale operations as it prepares to shutter nearly 700 stores nationwide. The company has also filed for Chapter 11 bankruptcy protection for the second time in less than two years “to maximize value for the benefit of the company’s stakeholders.”

“The decision was made following exhaustive efforts by the company to find a path forward that would allow continued operations in an immensely challenging environment driven by inflationary pressures on costs and consumer spending, among other factors,” Party City said in a statement.

Party City also filed for Chapter 11 bankruptcy protection in January 2023. That move allowed for a restructuring that eliminated nearly $1 billion in debt. But “macroeconomic headwinds more recently proved too severe” to overcome, the company said.

The New Jersey-based retailer said it will keep more than 95 percent of its 12,000 employees to help with the process of shutting down.

Barry Litwin took over as Party City’s CEO in August 2024 with a goal to “reposition the business for a stronger future.” At the time, Litwin said that he saw many opportunities to strengthen the company’s financial performance.

The following month, he announced that the company would be slashing prices on more than 2,000 items to help consumers stretch their dollars.

“Consumers continue to feel pressure on their budgets in an environment of uncertainty, sometimes making joyous occasions feel stressful due to affordability,” said Litwin in a Sept. 24 announcement. “We believe our latest price cuts will make celebrating more affordable with new savings available on many of the most frequently purchased items in our stores and online.”

The New Jersey-based company is the largest retailer of party goods in North America and has long considered itself the global leader in the celebrations industry. It faced increasingly tough competition from other retailers throughout the years, including Walmart, Target, and seasonal pop-up store Spirit Halloween.

Rising prices and a decrease in consumer spending also played a role in its demise, according to Neil Saunders, managing director of GlobalData Retail.

“Party City used to be one of the best games in town, but it is now something of an also-ran operation,” Saunders said. “There is likely still something of a role for Party City, but the company needs to financially restructure and to rethink its approach.”

The Associated Press contributed to this report.

From NTD News