RIP Party City: Dollar Tree and Five Below are looking to scoop up the doomed retailer’s stores

After nearly 40 years providing decor for countless birthdays across the United States, Party City is entering its final days of operations. And as the company’s last storefronts close their doors, competitors including Five Below and Dollar Tree are vying to move in for majorly discounted prices.

Party City filed for bankruptcy twice—first in 2023 and again this past December—before ultimately announcing at the end of 2024 that it could not recover its losses and would be permanently shutting down its 800 locations. In a memo sent to employees at the time, the company listed February 28 as its last day of operations (though, since then, some Redditors have noted extensions at their local locations).

While most Party City stores are living out their last hurrah this week, the company itself is working down to the wire to sell designation rights for more than 200 existing leases.

Discount retailers are stepping up

According to documents submitted to bankruptcy court in the southern district of Texas, Party City is currently hoping to secure deals with two new tenants: Five Below and Dollar Tree.

Per a memo submitted on February 19, the proposed Five Below deal would include 44 storefronts in exchange for a $2 million upfront payment, followed by an additional $70,000 for each lease agreement signed after 29 leases.

Likewise, the proposed Dollar Tree deal (submitted to court on February 21) would include 148 storefronts for a $1 million upfront payment, followed by an additional $65,000 for each lease agreement over 10 leases.

In both cases, Party City’s legal representation noted, the company has “an urgent need” to close the transactions quickly, given that its dwindling budget “does not provide for continued payment of rent.” Both proposals are expected to be heard in court this week.

Fast Company reached out to Party City, Five Below, and Dollar Tree for more information on the deals, and did not hear back from any of the parties involved at the time of publication.

Many legacy retailers are struggling in 2025

Party City’s final woes come amidst a larger “retail apocalypse” affecting stores like 7-Eleven, Big Lots, and Joann Inc. (which also just announced it will permanently cease operations).

As inflation persists and e-commerce continues to gain ground as consumers’ preferred method of shopping, physical retail locations are taking a major hit. According to a report from Coresight Research, this year could be the worst yet for U.S. retailers (including pandemic years), with an estimated 15,000 closures on the near horizon.

Based on a report from The Independent, while the Party City corporation’s days are numbered, the store won’t entirely fade into oblivion just yet. Currently, nine franchisees representing 29 Party City locations are planning to run their stores independently for the foreseeable future. A similar phenomenon has kept the last remaining Blockbuster store open years after the company itself died off—preserving a beloved site of retail nostalgia against all odds.