Party City has announced a plan to wind down its retail and wholesale operations after failing to keep the business afloat amid a challenging environment.

The company said it had exerted “exhaustive efforts” to find a path forward in an “immensely challenging environment” driven by inflationary pressures on costs and consumer spending.

Party City and certain of its subsidiaries also filed Chapter 11 processes to accomplish an orderly wind down and maximize value for stakeholders.

This is the second time the company entered Chapter 11. The first filing was in January 2023, followed by a restructuring in September the same year, which helped eliminate nearly $1 billion worth of debt.

About 700 stores nationwide will remain open for going out of business sales, offering “incredible deals and deep discounts” while supplies last.

“Party City is grateful to its team members for their commitment over the years and is retaining more than 95 per cent of its 12,000 employees for some time to assist with the wind down process,” it said in a statement.

The company’s senior lenders have committed to provide the financial support necessary to fund operations through the wind down, subject to court approval.

Party City has operated for nearly 40 years and was once the largest retailer of party goods in North America.