Sales for the first quarter of the year have decreased dramatically for US party retail chain Party City, which has announced its Q1 results today (Friday 21 June), revealing the extent of the effect of the Covid-19 pandemic.
The financial report revealed that Party City’s total retail sales over the period decreased by 20%, principally due to the temporary closure of all retail stores, which was implemented on 18 March, 2020.
Total revenues also decreased by just over 19%, to $414 million (from $513 million in Q1 2019), falling short of the projected $445 million.
North American e-commerce sales decreased by almost 7% when adjusted for kerbside pick-up, delivery and BOPIS sales (buy online, pickup in store) – all initiatives added in the wake of the Covid-19 closures.
“First and foremost, I want to express my deepest gratitude to our team members for their resilience in light of recent events affecting our country as well as the ongoing impact of the Covid-19 pandemic,” said Brad Weston, chief executive officer.
“Prior to the chain-wide store closures that were implemented in mid-March due to Covid-19, our first quarter results reflected sequential topline trend improvement. Our focus since then has been navigating the disruption created by the pandemic, with the health and safety of our team members and customers as our top priority.”
“We launched new initiatives to continue serving customers, including curbside pick-up and same day delivery to offer customers additional e-commerce fulfillment options while stores were closed,” Brad continued. “We are pleased to have fully re-opened over 85% of our stores as of today. In addition, to support our ongoing transformation initiatives, we recently announced an agreement with certain of our bondholders to support a set of transactions that, if consummated, is expected to reduce the Company’s debt by over 25% and raise approximately $100 million in new capital.”
As part of its ongoing store optimisation programme, Party City plans to close approximately 21 stores and open two new stores during the rest of 2020, with the remaining 10 planned new store openings likely to shift into 2021.
As a result of the continued disruption and uncertainty caused by the COVID-19 pandemic, the Company is not providing any additional financial outlook information at this time for fiscal 2020.