Party City Closes Its Doors After 40 Years

Party City, a well-known retailer in the party supplies sector, is set to completely cease operations. This decision comes after four decades of service as the company grapples with ongoing financial challenges.

Who Might Take Over Party City’s Locations?

In light of Party City’s closure, major competitors have emerged as potential successors in the discount retail arena. According to reports from Fast Company, both Five Below and Dollar Tree are looking to fill the void left by the iconic store.

Financial Proposals from Competitors

Five Below aims to acquire 44 locations, offering $2 million upfront along with an extra $70,000 for each lease agreement signed after the first 29.

Similarly, Dollar Tree has proposed a deal to take over 148 stores for a $1 million upfront payment and an additional $65,000 per lease agreement beyond the initial 10.

The Reasons Behind Party City’s Closure

Party City’s decline can be traced back to its bankruptcy filings in both 2023 and 2024, which ultimately indicated the company could not recover from its financial setbacks. Having operated over 700 stores, Party City underwent Chapter 11 bankruptcy proceedings to eliminate nearly $1 billion in debt.

However, the company faced debilitating issues stemming from inflation, overwhelming debt, and changes in consumer behavior that affected its profitability. Following corporate layoffs in December 2024, Party City initiated a closure process in February 2025.

A Broader Trend: Retailers Closing in 2025

Party City is not alone; numerous retailers are also shuttering their doors this year. Joann, for instance, has announced plans to close 500 stores nationwide as part of a restructuring effort. Other significant closures include:

• Volcom, Billabong, and Quicksilver are set to close over 100 stores after Liberated Brands filed for Chapter 11 bankruptcy.
• JCPenney is expected to close a number of stores by mid-2025.
• Macy’s announced the closure of 66 stores, with approximately 150 “underproductive stores” slated for closure through 2026.