Party City's party is over, shutting stores nationally, including more than 20 Chicago locations

Party supply retailer Party City is closing down all of its stores. The company has more than 20 locations in the Chicago area.

The party supply retailer is winding down operations effective immediately, CNN first reported on Friday, though it isn’t immediately clear when stores in Chicago and beyond will close. Some store employees received letters that the company would close stores Feb. 28 and employees would be terminated, according to CNN.

At a North Center store at 3417 N. Western Ave., a longtime shopper said she was shocked to learn of the closure. Lucy, a more than 40-year resident of Roscoe Village who asked to be identified only by her first name, said she can’t remember a time when Party City wasn’t open on Western Avenue.

Lucy was waiting for her daughter to pick out New Year’s Eve hats. She said she heard of Party City’s unwinding from a fellow shopper after commenting on how many sales the store was running.

“Everyone likes Party City,” Lucy said. “It has everything. I don’t have to go far.”

A manager at Party City’s North Center location, who asked to remain anonymous while still employed with the company, said they heard the news Friday from other store managers.

The manager hadn’t heard about a closing date and was told to keep following the schedule.

“I’m still in the dark,” the manager said.

Party City corporate officials did not respond to a request for comment.

The New Jersey-based chain's closure comes after nearly 40 years in business, the tail end of which was rife with financial turbulence. The retailer filed for bankruptcy in January 2023, CNN reported, canceling nearly $1 billion in debt through the proceedings. The company tapped a new CEO, Barry Litwin, four months ago, with a focus on strengthening Party City’s financial health.

In a video call with corporate employees, which CNN said it viewed, Litwin said Party City’s “very best efforts have not been enough to overcome” its financial struggles. The growth of e-commerce and pop-up concepts like Spirit Halloween have put a dent in Party City’s sales. In addition to party supplies, Party City is known for selling Halloween costumes and balloons.

Corporate employees were told Friday was their last day, according to CNN.

Party City’s North Center store did not have any signs Friday afternoon indicating the retailer’s imminent closure or final day. But there were a slew of ongoing sales, like 50% off select Christmas wrapping materials, 20% off New Year’s Eve decorations and 20% off Valentine’s Day accessories.

Party City isn't the only smaller chain to be struggling in the face of big box competitors. Retailer Big Lots announced Thursday it will start running "going out of business" sales after filing for bankruptcy in September.