Nation's largest party supply store cites financial challenges as it winds down operations

(CNN)- Party City, the nation's largest party supply store, is shutting down all its locations after almost 40 years in business. Corporate employees were informed on Friday that it would be their final day of work, as the company begins winding down operations immediately.

The company's CEO attributed the closure to ongoing financial challenges. Party City filed for bankruptcy in January 2023, canceling nearly $1 billion in debt and dissolving its stock. The move allowed most of its 800 stores to remain operational, but the chain could not overcome its financial hurdles.

This year, Party City continued to struggle under the weight of more than $800 million in debt, which significantly strained earnings. Despite efforts to restructure, the company could not compete with shifting consumer habits and rising competition.

The closure highlights a larger trend in the retail industry, as consumers cut back on discretionary spending amid economic uncertainty. Additionally, intense competition from big-box retailers like Amazon and Walmart has driven many smaller chains out of business. Party City now joins the growing list of retailers unable to weather these challenges.

Party City's shutdown marks the end of an era, leaving a void in the party supply market for families and event organizers across the nation.