In an emotional call with employees, Litwin expressed regret, stating, “We’ve done everything possible to try to avoid this outcome, but unfortunately, it’s necessary to commence a winddown process immediately.” Corporate employees were informed that the company could no longer sustain its financial challenges and that their benefits would end without severance pay.
The Collapse of an Iconic Retailer
Party City has faced mounting challenges in recent years. The company declared bankruptcy in January 2023 due to a staggering $1.7 billion debt load. Despite restructuring and exiting bankruptcy by September 2023, the chain still carried over $800 million in debt, which strained its earnings in 2024. Rising inflation, reduced consumer spending, and fierce competition from e-commerce giants like Amazon and big-box retailers like Walmart further exacerbated its troubles.
Adding to its woes, Party City struggled with a helium shortage that severely impacted its balloon business—a cornerstone of its operations. Although the company closed more than 80 stores between late 2022 and mid-2024, it wasn’t enough to stabilize its financial position.
Abrupt End for Corporate and Store Employees
Signs of trouble became evident over the past few weeks. Employees reported that Party City’s product development team was abruptly recalled from vendor trips and that corporate headquarters implemented strict security protocols. On December 10, all corporate employees were sent home, and access to the building was restricted. Internal communications revealed frustration among staff over the lack of transparency.
During Friday’s call, Chief Human Resources Officer Karen McGowan became emotional while explaining the end of employee benefits and severance, apologizing for the suddenness of the announcement.
Store Closures Nationwide
Party City, which once operated more than 850 locations across the U.S., including 24 in Ohio and dozens in Illinois, is shutting down all its stores. While some locations are set to remain open until February 2025, others are closing immediately. This marks a grim milestone in retail as consumers continue to pull back on discretionary spending.
In Ohio, Party City locations in Cincinnati, Columbus, and Cleveland are among those affected:
- Cincinnati: Western Hills (5555 Glenway Ave), Montgomery (8063 Montgomery Rd), Colerain Town Center (10204 Colerain Ave), Eastgate (4450 Eastgate Blvd. #280)
- Columbus: Easton Market (3707 Easton Market), Polaris Towne Center (1297 Polaris Pkwy)
- Cleveland: Steelyard Commons (3373 Steelyard Dr)
In Illinois, several Chicago-area locations, including stores in northern suburbs, have also confirmed closures, with final dates ranging from December 2024 to February 2025.
The End of an Era
Founded nearly 40 years ago, Party City became synonymous with celebrations, providing everything from balloons to Halloween costumes. However, its decline underscores the challenges facing brick-and-mortar retailers in an increasingly digital shopping landscape.
Party City now joins a growing list of retailers forced to close in 2024, including Big Lots, which recently announced “going out of business” sales. With consumer spending on the decline and inflation rising, the retail industry is bracing for a record number of closures this year—the highest since 2020.