Party City filed for bankruptcy twice in two years — then closed every store

Party City was a US party-supply retailer operating approximately 800 stores across North America. The company carried over $1 billion in debt, much of it from a leveraged buyout structure. When the pandemic disrupted celebrations — birthdays, graduations, weddings — the revenue that serviced that debt disappeared.

On 17 January 2023, Party City filed for Chapter 11 bankruptcy. The company secured $150 million in financing and completed a reorganisation on 6 September 2023 that eliminated over $1 billion of debt. Most stores were expected to stay open.

The reprieve lasted fifteen months. By December 2024, the company was running out of cash at multiple locations and filed for Chapter 11 a second time. This time there was no reorganisation: the plan was liquidation. Nearly 700 store locations across 45 states were auctioned. All corporate-owned US stores closed by 28 February 2025.

Dollar Tree acquired 150 leases; Five Below took 40. The intellectual property and wholesale operations were sold for $20 million to an affiliate of Ad Populum, forming New Amscan. Lease auctions generated about $14.5 million. PartyCity.com returned online in June 2025 under new ownership. The 800-store chain that had supplied America's birthday parties for decades was dismantled in two years.