US party retail chain Party City is looking beyond Halloween costumes as it sees increased growth in producing goods for other businesses.
Chief executive Jim Harrison revealed the retailer’s strategy, which is part of its plan to bounce back from a slowdown in recent years, in an interview with US media outlet Bloomberg.
The idea is to turn Party City into more of a consumer-products company, as in addition to selling masks and party plates, the company is also the largest wholesaler, designer and manufacturer of party goods in the US.
“We’re still looking to get to the consumers at the party, but the party store is no longer the only intermediary,” Jim explained.
He also revealed that while Halloween accounts for ‘roughly 20% of our retail business’, Party City’s wholesale business is ‘much steadier’. Increased production has also helped boost margins at retail, where roughly 80% of product sold in-store is sourced or manufactured in-house.
The best-performing and fastest-growing sector of Party City’s business is currently ‘alternative markets’ – which includes manufacturing novelty product such as jumbo popcorn buckets, personalised wedding favours and limited-edition KFC Halloween buckets.
The new approach has yet to pay off as Party City shares are down by 18% year-to-date, despite a Halloween season which saw the retailer hire an additional 25,000 workers and open 270 Halloween City pop-up stores to meet demand.
The company has plans to expand over the next five years, with plans to open a further 300 new stores. Party City is scheduled to report 2017 earnings later this week.
