OAN Staff James Myers
2:17pm – Friday, December 20, 2024
The party is over for America's favorite party store.
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The retailer, known for providing everything customers need to plan the perfect party, had more than 850 stores worldwide as of August, but lacks the funds to stay open. All stores will be closed because they have run out of supplies. 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.
Additionally, Litwin told employees that Party City's “best efforts are not sufficient to overcome our ongoing financial difficulties.”
He noted that the company has experienced high inflation over the past few years, which has driven up prices and discouraged shoppers from spending their hard-earned money.
“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.”
Nevertheless, Party City employees had been predicting the company's bankruptcy for weeks, according to reports. CNN.
According to a former company employee interviewed, the development team was called back from an annual trip with vendors and told to go home immediately two weeks in advance. CNN.
The team was informed that Party City had stopped paying suppliers and that the company believed the trip “posed a security risk.”
Meanwhile, all employees at Party City were sent home on December 10th.th Security guards then locked the front door of the company's headquarters in Woodcliff Lake, New Jersey.
Employees who participated in a Microsoft Teams conference call on Thursday were furious with management over the lack of communication regarding the sudden recall of product development teams, according to reports.
According to CNNOther employees learned that store managers had been notified that all Party City stores would close on February 1st.cent.
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 multiple times in a video conference call during which 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 in early December, after first filing for bankruptcy last year as it continued to have trouble paying rent at many of its stores.
Party City first filed for Chapter 11 bankruptcy protection in January of last year and received a $150 million debtor loan to support its operations. They reported estimated assets and liabilities of $1 billion to $10 billion.
In September, the retailer reached a plan to emerge from bankruptcy, writing off about $1 billion in debt and handing over the entire value of its stock to the retailer's lenders.
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