OAN Staff James Meyers
2:17 PM – Friday, December 20, 2024
The party’s over for America’s favorite party store.
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The retail store, known for supplying customers with everything they need to plan the perfect party, which has over 850 locations globally as of August, will be closing all of its stores after running out of money to stay in operation, according to CNN.
Barry Litwin, the company’s chief executive officer, told corporate employees on Friday that Party City is “winding down” operations immediately and that today will be their last day of employment.
“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said at the meeting, which was held on a video conference call.
Additionally, Litwin told his employees that Party City’s “very best efforts have not been enough to overcome” its ongoing financial troubles.
He noted that the company was hit by high inflation in the last few years, which prompted prices to increase and kept shoppers from spending their hard-earned money.
“It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome,” Litwin said.
“Unfortunately, it’s necessary to commence a wind-down process immediately.”
Nevertheless, Party City employees had anticipated the company’s collapse for several weeks, according to CNN.
The development team was recalled from its yearly trip with vendors and told to go home immediately two weeks ago, according to a former corporate office employee who spoke to CNN.
The team was informed that the company believed that the trip “posed a safety risk” as Party City had stopped paying its suppliers.
Meanwhile, all Party City corporate employees were sent home on December 10th and security locked the front entrance of company headquarters in Woodcliff Lake, New Jersey.
Reports indicated that employees who took part in a Microsoft Teams call on Thursday were furious with management over the lack of communication regarding the sudden recall of the product development team.
According to CNN, other employees learned that store managers had been informed that all Party City locations would be closed on February 1st.
“We recognize the flow of communication has not been how we typically handle sensitive matters like this,” Litwin said, acknowledging employee frustrations.
Karen McGowan, the company’s chief human resources officer, broke down in tears several times on a video conference call, in which she detailed severance and other benefits that would be extended to employees, CNN reported.
“I certainly know this is a lot to take in,” McGowan said before she paused and teared up.
“My apologies.”
The company had considered filing for bankruptcy a second time in earlier December after initially filing for one last year, as it continuously struggled to pay rent at a number of store locations.
Party City first filed for Chapter 11 bankruptcy protection in January last year, with $150 million in debtor-in-possession financing to support its operations. They reported $1 billion to $10 billion of estimated assets and liabilities.
In September, the retailer reached a plan to exit bankruptcy, which saw a cancellation of about $1 billion in company debt, turning all of its equity value over to the retailer’s lenders.
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