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Party City Closed All 700 Locations After Bankruptcy - Now It’s Making a Surprising Comeback

The festive brand is returning with a surprising new retail strategy.

By Amanda Machado , Edited by Calista Headrick

Updated May 21, 2026

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When Party City closed all 700 of its stores after filing for bankruptcy, it left a lot of us wondering where we'd go for party supplies, balloons, and costume pieces. Now, the brand is making a comeback, but in a manner you might not expect.

As brands look for ways to cut costs for themselves while keeping more cash in their wallets, companies like Party City are trying out new approaches. It's part of a bigger shift in how stores operate today. So what does this return actually look like, and what can we expect?

Why Party City previously closed all locations

In December of 2024, Party City announced it was closing all of its stores and laying off its staff, effective immediately, after four decades of operation. Staff received no severance pay and lost all benefits.

The reason? Party City was saddled with more than $800 million in debt, even after recovering from losses in the billions. Even a new CEO couldn't right the ship.

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The second bankruptcy in two years is what finally ended it

The news that Party City was shuttering locations wasn't exactly surprising, given the company's history with filing for Chapter 11 bankruptcy. It first filed in January of 2023 in an effort to reduce debt.

While the first effort did help the company's prospects and kept hundreds of locations open, it wasn't enough to keep Party City from filing for bankruptcy again in 2024. Still, employees were "caught off guard" by the abrupt closure.

Now Party City is coming back inside a shocking new place

While the majority of stores were shuttered by February of 2025, the Party City story was far from over. Last month, the company announced that 700 locations will open anew.

The company says it will be in time for graduation season, with openings continuing throughout 2026 in additional stores.

A new owner is behind the comeback

Party City is moving into its new chapter with new leadership. In February 2025, a company called New Amscan PC, LLC (an affiliate of Ad Populum, LLC), emerged as the winning bidder and purchased the company's intellectual property and assets for $20 million at a bankruptcy auction.

They're the brand behind The Clapper, Chia Pets, and other toys, action figures, and party supply merchandise.

What's different this time?

The previous incarnation of the brand in freestanding locations will remain a relic of the past as Party City implements a new operational model.

The retailer will be opening as part of the Staples chain, with locations inside the office supply juggernaut. That includes a balloon station and the ability to order party supplies online at Staples.com to pick up in-store.

Why this comeback is so notable

While companies resurrecting after a bankruptcy isn't unheard of, and can even be common, like we saw with Big Lots, it's arguably surprising that these two iconic brands have become "store-within-a-store" partners.

However, the symbiosis of the brands seems logical, as both chains have an overlap of merchandise and services. How the implementation will progress remains to be seen.

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What shoppers can expect to find in the new Party City sections

If you head to the Party City website, all of the products shoppers have come to expect are available, from balloons to invitations to costuming accessories. There's also a Party City section on the Staples website with a wide selection of products, including party decor, gift bags, party favors, and more.

In-store availability depends on your local outlet and its inventory, as the expansion is currently in progress. You may find special sales to commemorate the partnership, too.

How to find a Party City-inside-Staples location near you

If you're already in the process of planning your next festive gathering and need supplies, finding a Party City location is easy.

Simply head to the Party City or Staples website and type in your zip code to find a location.

FAQs

Is Party City owned by Staples?

No. The two brands are partners, not the same company. Party City is owned by New Amscan PC, LLC, an affiliate of Ad Populum, LLC, which purchased the brand's intellectual property and wholesale operations for $20 million at a bankruptcy auction in February 2025. Staples is the retail host, providing floor space and an e-commerce presence, while Party City operates as a branded section within Staples stores.

Is Dollar Tree buying Party City?

No, but this is a common misconception. During Party City's 2024 bankruptcy proceedings, Dollar Tree acquired the leases on 148 former Party City store locations, meaning it took over some of the physical real estate. It did not purchase the Party City name, brand, or business.

Will Party City at Staples sell costumes?

Yes, though the selection will be more limited than what the original standalone stores carried. Staples locations with Party City sections are stocked with a curated assortment that includes costume accessories alongside balloons, party decor, tableware, and party favors.

Bottom line

Party City's return shows how brands can adapt after major setbacks by trying new strategies and meeting customers where they are. While it's still early, this comeback could show us what the future of the changing retail landscape looks like.

If Party City is successful in this new format, it could be a sign of financial success following a difficult chapter for the retailer. For now, it's a wait-and-see moment for both the company and its customers.

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