Chile, it looks like Friday (December 20) is a GREAT day here Party city headquarters after a shocking announcement. With just days left until the holiday season, CEO Barry Litwin has laid off all of the company’s employees without severance pay. Why? After 40 years as the largest party store in the United States, Party City is closing all of its stores.
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This is why Party City closed
According to CNNin an engaging video call, Party City’s CEO said the company is “in decline.” In particular, operations were closed immediately. Along with the layoffs, CEO Litwin informed company employees that their benefits would be exhausted when the company ceased operations. The HR director was said to have shed tears while explaining that part.
Despite “best efforts,” Litwin said Party City was unable to resolve its financial problems. As a result, the company collapsed and was no longer sustainable. This is said to happen when businesses try to fight inflation by raising prices. However, higher prices reduce customer spending.
“It’s really important for you to know that we did everything we could to try to avoid this outcome,” Litwin said. “Unfortunately, it is necessary to begin the relaxation process immediately.”
As mentioned, money is the PC’s biggest problem. Litwin joined the company as CEO four months ago and one month after the business emerged from bankruptcy after declaring in January 2023. At the time, Party City had debt of approximately $1.7 billion, and bankruptcy disposed of about $1 billion of that. However, the remaining debt of more than $800 million has reduced its earnings in 2024.
Employees are suspected of being in trouble after THESE moves by the company
CNN reports that employees began to suspect something was going on! Two weeks ago, Party City asked its product development team to return home for safety reasons. The company allegedly stopped payments to overseas suppliers.
Additionally, all company employees were ordered home on December 10. The next day, Party City said in an email that employees would need a day’s notice to come into the office in the future.
Ultimately, however, the employees allegedly claimed that the PC had kept them in the dark about the company’s financial situation. Litwin CEO addressed that issue during the video call. “We realize the flow of communication is not how we typically handle sensitive issues like this,” Litwin said.
What’s next for store employees?
CEO Litwin told CNN that the shocking message was the “hardest” he has ever had to deliver.
However, company employees weren’t the only ones gagging Friday over the news. CNN reported that some store employees also received letters about the company’s closure. Party City reportedly plans to close all stores and lay off those employees on February 28. From 2022 to August 2024, the company closed more than 80 store locations. However, before this announcement, they managed to keep more than 800 stores open.
“While Party City believes that this closure is in the best interests of the company, we regret having to take this step and thank you for your valuable contributions and services to the company ,” the letter said.
This week, another major retailer, Big Lots, announced that it would also close more than 900 stores.
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What do you think Roomies?
