Party City, one of America’s largest party supply companies, is closing all of its stores after 40 years in business. Company CEO Barry Litwin gave this information in a video meeting with employees on Friday. He explained that the company’s operations would be suspended immediately and all employees would be laid off from that day. It was also said that the employees will not get any severance pay or benefits.
Collapse of the company due to financial difficulties:
Litvin said rising inflation has driven up company costs, while consumer spending has declined. The company made a lot of efforts to deal with this situation, but it failed. So the company had to take these drastic steps. “We tried everything to avoid this situation, but it was not possible,” he told the staff.
The stores will be closed until February:
A letter was sent to some store employees on Friday, stating that all stores would be closed by February 28 and the employees would be relieved. The company acknowledges and thanks employees for their contributions.
Coping with debt and bankruptcy:
After Party City filed for bankruptcy in January 2023, it wrote off about $1 billion in debt, but the remaining $800 million in debt made it difficult for the company to stay in business. After being appointed as the new CEO, Litvin began efforts to improve the company’s finances, but to no avail.
Restlessness in the minds of employees:
Over the past few weeks, news of the company’s collapse had been slowly trickling down to employees. The product development team was recalled from a vendor tour because the company had stopped paying its suppliers. On December 10, all corporate employees were sent home, while security was increased at the headquarters’ entrances.
Competition and market challenges:
The company Party City was famous for balloons, Halloween costumes and other party goods, but it failed to compete with big retailers like e-commerce sites, Amazon, Walmart. The balloon business was hit hard by rising costs and helium shortages during the pandemic.
Difficulty due to cost-cutting customers:
Many retailers are headed for bankruptcy in 2024 as rising inflation cuts consumer spending. Some big companies including Big Lots have also decided to close their stores.
Future of employees uncertain:
Due to the sudden decision of the company, the employees are unhappy. Chief Human Resources Officer Karen McGowan apologized and informed employees about their benefits in a video meeting. During that time, his tears flowed.
The ban on Party City companies is set to result in thousands of job losses, further exacerbating challenges in the retail industry.
