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Party City

From Wikipedia, the free encyclopedia
Party City Holdco Inc.
Company typePrivate
Industry
  • Retail
  • Manufacturing
  • Distribution
Founded1986; 38 years ago (1986); in East Hanover Township, New Jersey, U.S.
FounderSteve Mandell
Headquarters
Woodcliff Lake, New Jersey
,
United States
Number of locations
750+[1] (2015)
Area served
Worldwide
Key people
  • Brad Weston (CEO)
  • Todd Vogensen(CFO)
ProductsParty supplies, Halloween costumes
Brands
ServicesFranchising
RevenueIncrease$2.27 billion[1] (2014)
Increase$81.3 million[1] (2014)
Increase$56.1 million[1] (2014)
Total assetsIncrease$3.38 billion[1] (2014)
Total equityIncrease$487 million[1] (2014)
Number of employees
10,000+
ParentCanadian Tire (Canada only; 2019–present)
DivisionsRetail
Consumer Products Group
Websitepartycity.com
partycity.ca
partycity.com.mx

Party City Holdco Inc,[2] commonly referred to as Party City is an American chain of party stores founded in 1986 by Steve Mandell in East Hanover, New Jersey. The companies headquarters[3] are in Woodcliff Lake, New Jersey. The company is the largest retailer of party goods in the United States, Canada, and Mexico. The company operates over 850[4] company-owned and franchise outlets in over 70 countries around the world under the Party City, Halloween City, Toy City, Factory Card and Party Outlet brands.[5]

History

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1986–1993: Founding and franchising

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Facade of a Party City store in The Woodlands, Texas

Party City was founded by Steve Mandell in 1986. Mandell recognized that the market for party goods was highly fragmented with a lot of small mom-and-pop operations and 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. Mandell decided to specialize in the business when he struck out on his own to realize his long-cherished goal of running his own retail operation.

After scraping together $125,000, he opened a 4,000 square feet (370 m2) store in East Hanover, New Jersey, naming it Party City. The operation was immediately successful and within a year Mandell started planning for a second location. He also began to hear from people asking to franchise the Party City concept, and as a result the company 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 the company's ongoing focus on the holiday, and the major impact that the month of October would have on the company's bottom line. Year-round, the company stocked an inventory of Halloween costumes, if for no other reason than to make customers aware of the items for the next Halloween season.[6] One quarter ($560 million) of the companies 2015 revenue came from Halloween; the company operates about 300 Halloween City pop-up stores.[7]

Party City started franchising stores in 1989, with the first franchise store being located in Hazlet, New Jersey.[8] 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. The company'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. With a successful store model in hand, Mandell in late 1993 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 a tighter control on inventory, Mandell was insistent that company-owned units would be amply stocked with a wide range of merchandise.[6][8]

2005–2022: Acquisitions and developments

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Party City in Markham, Ontario, Canada
Party City in Rockaway NJ

In 2005, the company was sold to a subsidiary of AAH Holdings Corporation, owner of Amscan, a designer, manufacturer and distributor of party goods in America.[9] 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.[10]

With Amscan's 2011 acquisition of American Greetings' Designware party division, Party City added licensing agreements with Nickelodeon, Sesame Workshop, and Hasbro.[11] In 2011, Amscan became a licensee for MLB, NBA, NFL, NHL and NCAA party products and balloons, and Party City carries all teams in their respective markets and offers the entire assortment in larger stores and online.[12]

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.[citation needed] In 2012, these stores began to re-brand as Party City.[citation needed] In 2013, Party City bought iParty.[13] In December 2017, Party City acquired MG Novelty Corporation for around $5.5 million, which operated seven retail stores under the name Party Galaxy in the Oklahoma City metropolitan area.[14] In 2017, Party City purchased its franchised locations in the Carolinas.[15]

Advent International, Berkshire Partners LLC and Weston Presidio in 2012 sold Thomas H. Lee Partners a majority stake in Party City. In 2015, Party City Holdco Inc went public with Thomas H. Lee Partners retaining 55% and Advent International owned 19 percent. In April 2017, the company was approached by a private equity firm to acquire the company. In response the company placed itself on the market.[15]

Party City store in Fresno, California

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 was meant to capitalize upon the closure of the U.S. locations of Toys "R" Us. Some of its locations utilized vacancies created by the Toys "R" Us shutdown.[16][17][18]

In May 2019, it was announced that the chain would be closing 45 locations "to help optimize our market-level performance, focus on the most profitable locations, and improve the overall health of our store portfolio".[19]

Party City's Canadian operations were acquired by Canadian Tire in August 2019 for $174.4 million CAD.[20] Party City's parent organization is Party City Holdings Inc.

2023–present: Bankruptcy and restructuring

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A Party City store in Attleboro, Massachusetts.

In early 2023, rumors surfaced the company had the intention to file for Chapter 11 bankruptcy in the United States. Party City Holdco Inc. filed for bankruptcy on January 17, 2023, weighed down by a confluence of factors including the pandemic and changing consumer behavior.[21][22] The move is part of an attempt to restructure and reduce the company's debt. The company secured $150 million in financing that would allow to keep its stores open and operations running. The move would help the company complete an "expedited restructuring" to reduce its debt that should be done by the second quarter of 2023. On September 6, 2023, Party City officially announced they had completed their bankruptcy reorganization after a US judge approved their bankruptcy plans. Party City was successfully able to slash over $1 billion of debt during the reorganization. The majority of its stores are expected to stay open for now, however a handful of its 800 stores had permanently shuttered throughout the rest of 2023, particularly underperforming and less productive locations, and stores that are located in underdeveloped and obsolete areas.[23]

References

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  1. ^ a b c d e f "FORM S-1/A (Securities Registration Statement)" (PDF). Party City Investor Relations. Party City Holdco Inc. 10 April 2015. pp. 19–20. Retrieved 17 April 2015.
  2. ^ "Party City Holdings Inc - Company Profile and News". Bloomberg.com. Retrieved 2023-12-29.
  3. ^ Redmond, Kimberly (2022-10-07). "Party City celebrates opening of new Woodcliff Lake HQ (updated)". NJBIZ. Retrieved 2023-12-29.
  4. ^ City, Party. "Online Party Store with over 850 Store Locations". Party City. Retrieved 2023-12-29.
  5. ^ "PARTY CITY ANNOUNCES PRICING OF ITS INITIAL PUBLIC OFFERING". Party City. Party City Holdco Inc. 15 April 2015. Retrieved 17 April 2015.
  6. ^ a b "Party City Corporation History". Funding Universe. Retrieved 17 April 2015.
  7. ^ Clark, Patrick; Mosendz, Polly (2016-10-27). "How Halloween Stores Conquered America". Bloomberg. Retrieved 2019-02-13.
  8. ^ a b "Party City Holdings Inc. Press Kit" (PDF). Party City. January 2015. Archived from the original (PDF) on 20 March 2015. Retrieved 17 April 2015.
  9. ^ "Acquisition of Party City Corporation by AAH Holdings Completed". Press Releases. Amscan Holdings. Archived from the original on 17 April 2015. Retrieved 17 April 2015.
  10. ^ "Party America, a Leading Party Goods Retailer, Acquired by AAH Holdings Corporation". Press Releases. Amscan Holdings. Archived from the original on 17 April 2015. Retrieved 17 April 2015.
  11. ^ "Amscan Announces Strategic Alliance With American Greetings". Press Releases. Amscan Holdings. Archived from the original on 26 September 2015. Retrieved 17 April 2015.
  12. ^ Lefton, Terry (3 June 2012). "Party time". Street & Smith's Sports Business Journal. American City Business Journals. Retrieved 17 April 2015.
  13. ^ "iParty agrees to be acquired by Party City". Boston.com. 2013-03-01. Retrieved 2019-01-27.
  14. ^ "Party City Acquires Party Galaxy". www.businesswire.com. 2017-12-19. Retrieved 2019-01-27.
  15. ^ a b Hirsch, Lauren (April 27, 2017). "U.S. retailer Party City explores sale -sources". Reuters. Retrieved July 18, 2019.
  16. ^ "Toy City pop-up stores will fill former Toys R Us, Babies R Us locations". NJ.com. 6 September 2018. Retrieved 2018-12-22.
  17. ^ "Party City joins the list of retailers feasting on Toys 'R' Us remains". Fortune. Retrieved 2018-07-13.
  18. ^ Thomas, Lauren (25 June 2018). "Party City to open Toy City stores in wake of Toys R Us' demise". CNBC. Retrieved 26 June 2018.
  19. ^ "Party City CEO Says Closure of 45 Stores Is 'Completely Unrelated' to Helium Shortage". People.com. Retrieved 2019-05-11.
  20. ^ Rodriguez, Jeremiah (2019-08-08). "Canadian Tire buys up Party City for $174.4 million". CTV News. Retrieved 2019-08-08.
  21. ^ Jodi Xu Klein, Soma Biswas and Alexander Gladstone (6 January 2023). "Party City Plans Bankruptcy Filing Within Weeks". Walt Street Journal. Retrieved 17 January 2023.
  22. ^ "Party City files for bankruptcy after pandemic recovery falters". Bloomberg. 2023-01-17. Retrieved 2023-01-18.
  23. ^ "The majority of Party City stores will stay open as it exits bankruptcy". CNN. September 7, 2023. Retrieved September 9, 2023.
[edit]
Wikimedia Commons has media related to Party City.
  • Official US website
  • Official Canadian website
  • Official Mexican Website
  • Business data for Party City Holdco Inc.:

See also

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