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Party City is permanently shutting down.
CEO Barry Litwin said it was “necessary to commence a wind down process immediately” for the party supplies retailer, CNN reported Friday, citing comments from a Party City conference call with its corporate workers.
While speaking Friday with Party City staff, Litwin reportedly said Party City’s “very best efforts have not been enough to overcome” the issues it has been facing and that the company has “done everything possible that we could to try to avoid this outcome.”
A “Halloween Costumes” sign is displayed in the window of a Party City store in Richmond, California, on Sept. 22, 2020. (Getty Images)
Party City corporate employees will lose their jobs after Friday, according to the outlet. The company is reportedly eyeing widespread store closures at the beginning of February.
BIG LOTS TO START HOLDING ‘GOING OUT OF BUSINESS’ SALES AT REMAINING LOCATIONS
Party City’s retail footprint in North America included over 700 company-owned and franchised stores as of late October, according to a press release published that month.
Difficulties from inflation, debt and other factors reportedly hurt the company. FOX Business reached out to Party City for comment on its reported plans to permanently close.
A Party City store in Miami on Jan. 18, 2023. (Joe Raedle/Getty Images / Getty Images)
This reportedly comes nearly four decades after the company launched and about 14 months after it exited bankruptcy.
AMERICAN FREIGHT CLOSING ALL STORES AMID PARENT COMPANY’S BANKRUPTCY FILING
When Party City completed its Chapter 11 bankruptcy process last year, it said it had “substantially strengthened its capital structure by eliminating nearly $1 billion in debt, enhanced its liquidity, and optimized its Party City store portfolio by having negotiated improved lease terms and exited less productive stores.”
A Party City store in Rockaway, New Jersey, on Sept. 6, 2019. (iStock / iStock)
It converted that debt to equity shares that would be owned by its lenders.
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Party City was removed from the New York Stock Exchange in January 2023 due to the bankruptcy process. Prior to that, it had traded on the exchange for about eight years.
Speculation about the retailer weighing whether to file for bankruptcy again surfaced last week.
While all corporate-owned stores are shutting down, a few dozen independently-owned Party City locations will remain in operation.
“Local Party City franchisees are not affected by the bankruptcy,” Mitesh Patel, a franchisee from the Austin, Texas, area told FOX Business. “There are a total of 29 franchise stores who will have their stores open and ready to continue serving their local communities.”
Breck Dumas contributed to this report.
