The celebration is over at Party City. After emerging from a prior bankruptcy last year, the retailer has now filed for Chapter 11 bankruptcy again.

The company, headquartered in New Jersey, submitted its filing on a Saturday morning in the U.S. Bankruptcy Court for the Southern District of Texas. According to the filing, Party City Holdings Inc. plans to “carefully close down its operations and liquidate its assets.”

The assets are set to be auctioned, and if no buyers emerge, they will “begin store clearance sales to sell off all retail and wholesale inventory from Party City Group Companies,” the filing stated.

Previously, Party City operated roughly 750 stores. It had filed for Chapter 11 bankruptcy in January 2023 and successfully came out of it in October 2023 with a reduction of $1 billion in debt and a new CEO, Barry Litwin, who joined in August 2024.

However, the retailer has clearly not stabilized financially enough since then. Recently, Bloomberg reported that the company was contemplating another sale or filing for bankruptcy once more.

In their bankruptcy declaration on Saturday, Party City noted it has assets estimated between $1 billion to $10 billion and the same range for liabilities, indicating it has between 10,000 and 25,000 creditors.

Litwin informed employees in a meeting on Friday that operations are “immediately winding down,” with that day marking their last day of work, CNN reported.

YSL News has sought confirmation from Party City regarding their plans.

“That is undoubtedly the hardest message I have ever had to communicate,” Litwin remarked during a video call, which CNN reported on. He stated that Party City’s efforts weren’t sufficient to tackle their financial difficulties.

Party City closing: The retailer’s efforts to recover

In an effort to revive sales, Party City reduced prices in September, lowering costs on over 2,000 items by an average of 20% to attract hesitant customers. “Consumers are feeling the strain on their budgets amidst uncertainty, which sometimes turns happy moments into stressful situations due to cost,” Litwin explained at that time.

Various locations have closed recently, including stores in Topeka, Kansas, and Wichita Falls, Texas.

As reported by Coresight Research, 18 store closings have been confirmed, with another one planned for 2024, following 65 closures in 2023.

Other retail chains are also facing difficulties, as Macy’s announced a fast-tracked plan for store closures last week, and Big Lots revealed earlier this week its plans to shut down entirely. This year alone, there have been 7,327 store closures and 5,919 openings nationwide, according to Coresight Research. This marks a significant increase in closures compared to 2023, which saw 5,473 store shut-downs (and 5,751 openings) and represents the largest number of closures since 2020, when pandemic-related shutdowns led to widespread business failures, as noted by Coresight Research CEO Deborah Weinswig in her comments to YSL News.

“We began the year anticipating strong performance with more openings than closures. However, 2024 has turned out to be a tough period for physical retailers,” she stated.

“Customers have little tolerance for long wait times, out-of-stock items, and poorly organized stores. Party City has been plagued by all three of these issues, resulting in dire consequences,” Weinswig added.

Party City closing: Signs of previous struggles

In October 2024, a group of former Party City employees initiated a class action lawsuit against the company regarding layoffs in September, claiming they did not receive the necessary notification before being let go.

When Party City relocated its headquarters to Woodcliff Lake, New Jersey, an affluent suburb near New York, in 2021, the state granted the company a $10 million tax incentive.

However, following the bankruptcy announcement, state officials indicated that Party City had yet to receive any tax benefits, which would only come once the company proved it had fulfilled its job creation commitments.