The company files for bankruptcy for the second time in two years

The party comes to an end in Party City. The retailer, which emerged from a previous bankruptcy last year, has again filed for Chapter 11 bankruptcy.

The New Jersey-based company filed a petition early Saturday in the U.S. Bankruptcy Court for the Southern District of Texas. In the filing, Party City Holdings Inc. will “conduct an orderly wind-down of its business and the liquidation of its assets.”

The company will put its assets up for bid or, if a sale does not occur, “initiate store closing sales to liquidate all of Party City Group Companies’ retail and wholesale inventory and locations,” the filing said.

Party City, which operated about 750 stores, filed for Chapter 11 bankruptcy in January 2023 and emerged in October 2023 with $1 billion less in debt. It also appointed a new CEO, Barry Litwin, who joined the company in August 2024.

But the retailer was apparently not on a sufficiently solid financial footing. Bloomberg recently reported that the company was considering a sale or a second bankruptcy.

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In its bankruptcy filing Saturday, Party City reported assets ranging from $1 billion to $10 billion and liabilities ranging from $1 billion to $10 billion – the company said it has between 10,000 and 25,000 creditors.

As CNN reported Friday, Litwin told company employees in a meeting Friday that Party City was immediately “ceasing operations” and that today would be her last day on the job.

USA TODAY has reached out to Party City to confirm its plans.

“This is without question the most difficult message I have ever had to deliver,” Litwin said in the video conference, which CNN said it had seen. Party City’s “best efforts were not enough to address its financial challenges,” Litwin said, according to CNN.

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Party City closing: Retailer attempted a comeback

Like many other retailers, Party City cut prices in September – by an average of 20% on more than 2,000 items – to attract wary customers and boost sales. “Consumers continue to feel pressure on their budgets in an environment of uncertainty, sometimes making joyful occasions feel stressful due to affordability,” Litwin said at the time.

Still, several stores had reported closures in recent months, including in Topeka, Kansas, and Wichita Falls, Texas.

According to Coresight Research, Party City has had 18 confirmed closures, with another planned for 2024. This comes after 65 confirmed closures in 2023, the research firm said.

Other retail chains have also faltered recently: Macy’s announced accelerated store closures last week, and Big Lots announced earlier this week that it was going out of business. So far this year, there have been 7,327 store closings and 5,919 new store openings in the U.S., according to Coresight Research. That far exceeds closures in 2023, when the research firm tracked 5,473 closures (and 5,751 openings) — and is the highest number of store closures since 2020, when the pandemic-related closure of physical stores and the resulting fallout led to mass closures, said Deborah Weinswig , CEO of Coresight Research told USA TODAY.

“We entered 2024 anticipating that this would be a strong year, with store openings outpacing closures. However, 2024 has proven to be a challenging year for brick-and-mortar retail,” she said.

“Consumers have little patience for long lines, lack of supplies and poorly stocked stores. Party City has suffered from all three of these problems and paid the ultimate price,” Weinswig said.

Party City Closing: Earlier Signs of Trouble

In October 2024, several former Party City employees filed a class action lawsuit against the company over September layoffs, alleging that they were not given the legally required notice period before their jobs were abruptly terminated.

The state of New Jersey had promised Party City a $10 million tax break in 2021 when the company moved its headquarters to Woodcliff Lake, an affluent Bergen County suburb south of the New York state border.

However, after the company filed for bankruptcy, state officials said the company had not yet received tax break funds and would not do so until it proved it had created the jobs it had promised.

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