Chile, it seems that Friday (December 20) was a HARD day to Party city headquarters after an explosive announcement. With the holidays just days away, CEO Barry Litwin laid off all of the company’s employees without severance pay. For what? After 40 years as the largest party supply store in the United States, Party City is closing all of its stores.

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Here’s why Party City is closing its doors

According to CNNIn a crushing video call, Party City’s CEO said the company was “going out of business.” Operations, in particular, were immediately halted. Along with the layoffs, CEO Litwin informed company staff that their benefits would end as the company ceased operations. The HR director reportedly broke down in tears explaining this part.

Despite “every effort,” Litwin said Party City was unable to avoid financial problems. As a result, the business collapsed and is no longer viable. This reportedly happened as the company attempted to combat inflation by raising prices. However, higher prices have reduced customer spending.

“It’s really important that you know that we did everything we could to try to avoid this outcome,” Litwin said. “Unfortunately, it is necessary to immediately begin a reduction process.”

As mentioned, money is the PC’s biggest problem. Litwin joined the company as CEO four months ago and a month after the company emerged from bankruptcy after reporting in January 2023. At the time, Party City had about $1.7 billion debts, and the bankruptcy covered about $1 billion of it. However, the remaining debt of more than $800 million has reduced their revenue for 2024.

Employees Suspect Problems After These Company Actions

CNN suggested that employees were beginning to suspect something was afoot! Two weeks ago, Party City ordered its product development team to go home for safety reasons. The company reportedly stopped paying its foreign suppliers.

Additionally, all company employees were ordered to return home on December 10. The next day, Party City said in an email that employees would have to give one day’s notice to come into the office in the future.

Ultimately, however, employees reportedly claimed that PC left them in the dark about the company’s financial situation. CEO Litwin spoke about this during the video call. “We recognize that the flow of communication is not how we typically handle sensitive issues like this,” » Litwin said.

What’s next for store employees?

CEO Litwin told CNN the bombshell message was the “hardest” he’s ever had to give.

However, company employees were not the only ones gagged by the news on Friday. CNN reports that some store employees also received letters about the business closing. Party City reportedly plans to close all stores and lay off these employees on February 28. Between 2022 and August 2024, the company closed more than 80 stores. However, before this announcement, it had managed to keep more than 800 stores open.

“While Party City believes these closures are in the best interest of the Company, we regret having to take this action and thank you for your valuable contributions and service to the Company.” the letter would have said.

This week, another major retailer, Big Lots, announced the closure of more than 900 stores.

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