Party City going out of business after four decades

The party supply chain Party City is closing its doors nationwide amid continuing financial challenges.

Party City CEO Barry Litwin told the company’s employees in a video meeting Friday that it would be their last day of work and that the chain was winding down operations immediately, according to CNN.

Party City had been in business since 1986.

The company’s moves to try to overcome hundreds of millions of dollars in debt were unsuccessful. Party City declared bankruptcy in January 2023 with $1.7 billion in debt. And while filing for Chapter 11 bankruptcy protection eliminated more than half its debt, the company still had about $800 million in debt on its books. It exited bankruptcy earlier this year.

The chain had closed about one 1 in 10 of its stores between 2022 and this past August, according to CNN.

The company had explored the possibility of filing for bankruptcy again or liquidating its stores, according to Bloomberg.

Problems acquiring the helium needed to fill party balloons exacerbated the company’s problems. In 2019, a shortage was caused by a confluence of factors, including a 2017 embargo against Qatar and the depletion of the U.S. strategic helium reserve, Party City said in an FAQ page on its website.

Founder Steve Mandell, who was forced out in 1999, pins the blame for Party City’s demise on private equity firms.

“First, we were the discount party superstore. Today, it is not a discount store. The prices are top dollar,” Mr. Mandell told the New York Post, adding that “Party City had great variety” at its peak.

The company was bought by private equity firms in 2005.

The private equity firms also owned some of the makers of the balloons sold at the stores, reducing competition among suppliers, Mr. Mandell said.