After nearly 40 years in operation, Party City is going out of business, with all stores closing.
CEO Barry Litwin told its corporate employees Friday that Party City is “winding down” operations immediately and that today will be their last day of employment, according to CNN. Party City staff were told they would be not receiving severance pay, and that their benefits would end as the company goes out of business.
“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said on a video conference meeting.
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“It’s really important for you to know that we’ve done everything possible that we could to try to avoid this outcome,” Litwin said. “Unfortunately, it’s necessary to commence a winddown process immediately.”
The company’s Chief Human Resources Officer Karen McGowan broke down in tears several times on the short video conference call.
“I certainly know this is a lot to take in,” McGowan said. “My apologies.”
The company’s plans to shutter business appear to have trickled down slowly in recent weeks, according to the CNN report. Two weeks ago, Party City’s product development team was pulled early from its yearly trip with vendors and told to return home immediately, according to a former Party City corporate office employee. They were told the company believed the trip was a potential safety risk, because Party City had stopped paying its suppliers.
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Those employees were sent home on Dec. 10, and the next day, corporate headquarters locked the doors at the front entrance. In an email sent to staff on Dec. 11, the company’s security team told employees they needed to provide a one-day notice to security to gain access to the building, being instructed to “not allow anyone to tailgate when entering the building” to avoid letting people in the door who did not have badge access.
Employees were reportedly caught off guard, because management did not mention any financial trouble at recent town hall meetings. On the call Friday, Litwin apologized for the lack of communication.
“We recognize the flow of communication has not been how we typically handle sensitive matters like this,” Litwin said.
Litwin was hired as CEO four months ago, writing at the time of his hire in a LinkedIn post the company’s “main priority is to strengthen our financial health, and there is work ahead of us.”
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The company had declared bankruptcy in January 2023, but exited bankruptcy a month after Litwin’s arrival.
Until Friday, Party City was the largest party supply store in the United States, with approximately 6,400 full-time and 10,100 part-time workers as of 2021.
This article was originally published at www.washingtonexaminer.com
