“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% of its 12,000 employees to help with the process of shutting down.
Party City has faced growing competition from Walmart and Target and increasingly from occasion-based pop-up stores such as Spirit Halloween, which announced in October that it would also open 10 Spirit Christmas stores. That pressure has intensified in an era of rising prices, including for helium used in party balloons, and slowing consumer demand.
The competition has also hit other retailers: Last week, discount chain Big Lots said it would start going-out-of-business sales at its remaining locations after a sale of the company didn’t materialize. Party City's website similarly shows going-out-of-business discounts of up to 50% on the shop's entire assortment goods.