Retail history
Party City was founded by Steve Mandell in 1986. Mandell recognized that the market for party goods was highly fragmented, with many small mom-and-pop operations. He noticed that a large number of retailers carried limited supplies. Additionally, he saw that many big players were trying to dominate the party goods market. After scraping together $125,000, Mandell opened a 4,000 sqft store in East Hanover, New Jersey, naming it Party City. The operation was immediately successful, and within a year, Mandell began planning for a second location. He also began to hear from people asking to franchise the Party City concept, and as a result, Party City began its evolution into a national chain. After his first year in business, Mandell also decided to concentrate on Halloween. In 1987, over a quarter of his store was turned into a "Halloween Costume Warehouse". The move proved highly successful and led to Party City's ongoing focus on the holiday, and the major impact that the month of October would have on Party City's bottom line. Year-round, Party City stocked an inventory of Halloween costumes for no reason other than to make customers aware of the items for the next Halloween season.[7] One quarter ($560 million) of Party City's 2015 revenue came from Halloween; Halloween City operated about 300 Halloween City pop-up stores.[8] Party City started franchising stores in 1989, with the first franchise store located in Hazlet, New Jersey.[9] By 1990, Mandell also owned four Party City stores. At this point, he incorporated the business as a franchising operation, with his stores forming the core of the chain. By the end of 1990, Party City outlets numbered 11; five more franchised stores were added in 1991, 16 in 1992, and another 26 in 1993, bringing the total to 58. Party City was now a nationwide chain with store locations ranging from Hawaii to Puerto Rico. Party City's annual revenues in 1993 topped $2.4 million and net profits approached $235,000. During these first four years of operation, Mandell refined the Party City concept, including store design, product mix, choice of suppliers, and the implementation of systems. In late 1993, with a successful store model in hand, Mandell decided to de-emphasize franchising in favor of opening company-owned stores, which would generate greater returns for the corporation than it could receive on fees and royalties from franchised outlets, as well as allow Mandell to better control the destiny of Party City. While franchisees might maintain tighter inventory control, Mandell insisted that company-owned units would be amply stocked with a wide range of merchandise.[7][9]
In 2005, Party City was sold to a subsidiary of AAH Holdings Corporation, owner of Amscan, a designer, manufacturer, and distributor of party goods in America.[10] Amscan then went on to acquire the party retailers Party America in 2006 and Factory Card & Party Outlet in 2007. Both retail chains began to operate under the Party City network, thereby making Party City the largest party supplies retailer in the United States.[11] With Amscan's 2011 acquisition of American Greetings' Designware party division, Party City added licensing agreements with Nickelodeon, Sesame Workshop, and Hasbro.[12] In 2011, Amscan became a licensee for MLB, NBA, NFL, NHL, and NCAA party products and balloons, with Party City carrying all teams in their respective markets and offering the entire assortment in larger stores and online.[13] In 2011, Party City expanded outside the United States with the acquisition of the Canadian retailer Party Packagers, making Party City the largest party goods retailer in North America. In 2012, these stores began to re-brand as Party City. In 2013, Party City bought iParty.[14]
In June 2018, Party City announced that it would open around 50 Toy City pop-up stores beginning in September 2018, alongside its Halloween City stores. The stores operated through the conclusion of the holiday season and were meant to capitalize upon the closure of the U.S. locations of Toys "R" Us. Some of its locations used vacancies created by the Toys "R" Us shutdown.[17][18][19] In May 2019, Party City announced that it would close 45 locations "to help optimize our market-level performance, focus on the most profitable locations, and improve the overall health of our store portfolio".[20] In August 2019, Party City's Canadian operations were acquired by Canadian Tire for $174.4 million CAD.[21] On January 17, 2023, Party City Holdco Inc. filed for Chapter 11 bankruptcy, weighed down by a confluence of factors including the COVID-19 pandemic and changing consumer behaviors.
In December 2024, Party City warned that it would be preparing to file for bankruptcy for the second time in two years, as it was running out of cash to continue operating at several of its locations. Party City announced that it would close all of its corporate-owned US stores by February 28, 2025, as part of a winding-down procedure. Franchised locations not owned by Party City, as well as Canadian locations, will remain open, the latter of which is currently owned by Canadian Tire.[25][26][27] On December 24, 2024, Party City reported that Mitch Modell, former CEO of Modell's Sporting Goods, was looking to buy Party City in an effort to save thousands of jobs. Modell planned to release financing sheets by the end of that week, but nothing further has been announced as of January 2025.[28] Party City auctioned off leases for nearly 700 store locations across 45 states. By early 2025, these auctions had generated around $14.5 million. Among the top bidders for these store leases were Dollar Tree, which secured 150 leases, and Five Below
As of June 2025, PartyCity.com in the United States is back online and fully operational under new ownership. The website has resumed accepting orders and is open for business. In late 2025, it was announced that the US-based office supply store Staples would be launching a Party City store-within-a-store concept in its retail locations.
