Peter Smith (pictured), formerly evp of global supply chain for children’s retailer, Carter’s, will lead Party City’s efforts to increase efficiencies across the firm’s operations.
Brad Weston, president and ceo of Party City, announced Peter’s appointment in a recent Q3 earnings call and said he will oversee initiatives related to “manufacturing, souring, inventory optimisation and supply chain efficiency.”
The appointment comes as Party City prepares to launch a cost-cutting plan of $30 million to offset the impacts of lower demand and inflationary pressures. The plan will include cutting the workforce by 19%, as well as reducing costs associated with raw materials, logistics and operations.
Brad commented: “We expect to enter 2023 and this next phase of our evolution as a leaner, more efficient organisation.”
Party City was hit by increasing helium costs this year and faced $20 million in extra expenses related to helium in FY22.
Such supply chain costs have caused the retailer to this week lower its 2022 earnings guidance. The initial 2022 outlook was $275 to 300 million, but has been reduced each quarter, now sitting at $130-150 million.
The retailer said that of its higher inventory costs, $40 million were due to inflation and $67 million were driven by Halloween costs.
Brad commented: “As expected, we saw continue elevated freight costs in the quarter, especially as we brought in Halloween products earlier than last year. In terms of the broader freight market, freight spot prices are moderating and well off their recent highs. However, given how our inventory turns, we would not expect to see the associated benefit until later in 2023.”