The party is over in Party City.
The New Jersey-based retailer, which had more than 850 stores around the world as of August, will close all of its stores after running out of funds to stay open. According to CNN.
The company's CEO, Barry Litwin, told employees on Friday that Party City was “winding down” operations effective immediately and that today would be their last day of employment.
“This is without a doubt the most difficult message I have ever had to convey,” Litwin said during the meeting, which was held via video conference.
Mr. Litwin told employees that Party City's “best efforts were not sufficient to overcome financial difficulties.”
He said the company was doomed by persistently high inflation as costs soared and consumers cut back on spending.
“It is very important that you know that we have done everything possible to avoid this outcome,” Litwin said.
“Unfortunately, we must begin the downsizing process immediately.”
The Post has reached out to Party City for comment.
According to CNN, Party City employees have been predicting the company's collapse for weeks.
A former company employee who spoke to CNN said the development team was called back from an annual trip with vendors and told to go home immediately two weeks ago.
The team was informed that Party City had stopped paying suppliers and that the company believed the trip posed a safety risk.
All Party City employees were sent home on December 10, and security locked the front entrance of the company's headquarters in Woodcliff Lake, New Jersey.
Employees who participated in a Microsoft Teams chat on Thursday were angry with management for what they said was a lack of communication about the product development team's recall.
Other employees learned that store managers informed them that all Party City stores will be closing on February 1, CNN reported.
Employees were furious when company executives failed to mention financial issues during a recent town hall meeting.
Litwin acknowledged the employees' frustration and said, “We recognize that the communication flow to date was not the normal way to handle sensitive matters of this nature.”
Karen McGowan, the company's chief human resources officer, broke down in tears several times during a video conference as she detailed the severance packages and other benefits available to employees, CNN reported.
“I certainly know this is a lot to take in,” McGowan said, before stopping and crying.
“very sorry.”
The company was considering filing for bankruptcy for a second time earlier this month, after first filing for bankruptcy last year as it struggled to pay rent at some of its stores.
Party City, known for selling balloons and other party supplies, first filed for Chapter 11 bankruptcy protection in January of last year, taking out a $150 million debtor loan to support its operations. His estimated wealth is reported to be between $1 billion and $10 billion. And debt.
In September, the retailer reached a plan to emerge from bankruptcy, writing off about $1 billion in debt and turning over the entire value of its stock to the retailer's lenders.
Distressed retailers often seek bankruptcy protection after the holiday season to take advantage of the cash cushion from recent sales.
After emerging from bankruptcy, the company hired Litwin as CEO. “Our main priority is to strengthen our fiscal health, and there is much work ahead of us,” he wrote.
This is a developing story. Please check the latest information.
