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Party City Continues Retail Expansion In Wake Of Slow Q2

The chain plans to open 30 more stores by the end of the year — and it’s leaning into omnichannel in order to draw traffic to these new locations.

Despite posting a loss of $23 million in Q2, celebration supplies emporium Party City plans to open 30 new stores and complete 50-60 renovations in 2015 —and its looking to omnichannel strategies to lead the way to better sales.

“Retailers that enable the customer to seamlessly move between channels to make purchases improve customer loyalty and profitability,” said Leslie Hand, VP, IDC Retail, pointing to why Party City and similar retailers may opt to go all in on targeting cross-screen consumers, rather than falling back on e-commerce only efforts. “Additionally, retailers that can drive customers from the online channel into stores have stronger growth rates than they might have had without this approach.”

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And growth — soon — is indeed what Party City seeks. The chain issued its IPO only this past April, and it saw stock prices increase by 21 percent after opening at $17. But as Q2 drew to a close, light store traffic led to a loss of 20 cents a share.

Party City posted stronger Q1 results, with revenues increasing by 6.7 percent compared to Q1 2014, so it’s too soon to label the downturn as a trend. But as consumers increasingly become cross-screen — browsing party products across desktop and mobile, and continuing smartphone research while actually shopping — brands that don’t track the consumer journey and target shoppers with a consistent message across devices will continue to lose out on sales. Party City would do well to prioritize a consistent omnichannel message across platforms (even if omnichannel is an “imperfect word”) in order to keep this from happening.

Whatever the case, Party City’s executive team remains confident that consumers — who still make over 90 percent of purchases in stores, by the way — are likely to turn to physical locations for their party planning, especially when it comes to day-of necessities. It’s simply a matter of reaching them in the right way.

“The consumable nature of our products and our unmatched product depth and breadth drives repeat visits by our customers who view us as the destination of choice for their party supply needs to celebrate life’s happy events like birthdays, milestones, holidays and seasons,” CEO James M. Harrison said in a statement. “We are also ahead of schedule for securing sites for our temporary Halloween City stores and expect to open roughly 325 locations this year.”

About The Author
Lauryn Chamberlain Lauryn Chamberlain @laurynchamberla

Lauryn Chamberlain is the Associate Editor of GeoMarketing.com. A New York City based journalist, she specializes in stories related to retail, dining, hospitality, and travel.