Party City has an emotional closing after nearly 40 years of business. photo by Daysi Calavia-Robertson
After nearly 40 years of business, the Party City franchise is closing all stores nationally.
From Bed Bath and Beyond to JC Penney, many franchises have struggled in recent years due to inflation. In particular, post-Covid inflation has forced businesses into raising their prices on merchandise, which has ultimately led to lower consumer spending. In fact, retail closure rates were up by 69% in 2024 in comparison to the previous year (Newsweek.) One of the major franchises closing their stores in 2025 is Party City. CEO of the company Barry Litwin has announced all locations will be closed on February 28th due to heavy debt burden, rising costs, and increased competition both online and in stores.
Litwin announced that Party City would be filing for bankruptcy in January 2023. The company continued to struggle in paying off the $1.7 billion debt collected after the store cancelled almost one billion in debt by going bankrupt (CNN.) Despite Party City’s attempts to stay in business, they still had a substantial amount of debt, though the franchise still managed to keep over 800 stores open.
There is no single reason that can be pinpointed as to why an increasing number of companies have gone out of business, but a main factor can be attributed to several industries and ways of life being changed by one thing: online shopping. Since the pandemic, retail stores, video game stores, book stores, and other small businesses have struggled severely. But those aren’t the only businesses that are having a difficult time; entire franchises have been going out of business. This is not only a direct result of post-pandemic inflation, but due to online sites such as Amazon and other online retailers making franchise’s survival extremely difficult. Amazon has made shopping so easy, as a consumer only has to order something online and get the package delivered to the doorstep the next day. This goes for medications, clothing, groceries, books, furniture, and more. All of the companies and franchises that sell these commodities are bound to either struggle or be forced to change dramatically in order to be an active competitor with Amazon. This dilemma, along with inflation, overall reduced foot traffic inside of physical stores, higher operating costs, and effects still prominent from the pandemic, has left several companies with large-scale closures.
Party City was one of the largest party supply stores in the United States, with 6,500 full-time workers and 10,100 part-time workers in over 850 stores across the country (CNN.) Once the closure was announced, several corporate employees were told this would be their last day of employment, and the workers were sent home with no severance, as well as being told that their company benefits will end when the company eventually goes out of business. In-store employees will also be forced to leave and find new jobs without severance or continual benefits.
A few ways to keep small and local stores in businesses are to try to avoid shopping from large online marketplaces, find the time to go into a local business, or call and see if they have an item before going to Amazon. Additionally actively participating in giving positive feedback, refer the business to friends and family, and advocate to support local businesses within the community. The closing of Party City is emotional for many, but this is not the last franchise that will close in the near future.
