Party City on Friday announced it will close all of its stores and has initiated corporate layoffs effective immediately, according to a CNN report.

CEO Barry Litwin told corporate employees in a meeting viewed by CNN that Party City has to “commence a winddown process immediately,” and that Friday would be their last day of work for the company.

“That is without question the most difficult message that I’ve ever had to deliver,” Litwin said at the meeting, according to the report.

CNN reported the company’s closure was due to ongoing financial challenges at the party supply retailer, which less than two years ago filed for bankruptcy protection over its inability to pay off $1.7 billion in debt.

The New Jersey-based chain exited bankruptcy in September 2023 through a plan that included transitioning into a privately held company and canceling nearly $1 billion in debt. A majority of its 800 U.S. stores were able to stay open as it emerged from bankruptcy.

Litwin was named CEO in August and said at the time he saw “many opportunities to strengthen our financial performance and build a leading end-to-end celebration experience for consumers,” according to a press release. 

Prior to his appointment, he was the CEO of Global Industrial Company, a distribution leader in industrial products.

Competition in the party goods and costume space has grown in recent years, including Spirit Halloween’s continued rise within and outside of the spooky season. The holiday costume chain announced in October that it would open 10 new “Spirit Christmas” stores, with some of the stores being converted from existing Spirit Halloween locations.

Online retailers have also added pressure to Party City’s operation, even as the company began to offer items on Amazon in 2018.

Representatives for Party City did not immediately respond to CNBC’s request for comment on CNN’s report or potential story closures. Read the full CNN report here.