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Party City's Logo
Party City is an American retail chain of party supply stores, based in Rockaway Township, New Jersey. The company is the largest retailer of party goods in the United States and Canada, operating over 750 company-owned and franchise outlets under the Party City, Halloween City, and Factory Card & Party Outlet brands.
History[]
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, a large number of retailers carrying limited supplies, and no big players dominating the 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 the Party City concept, and as a result Party City began its evolution into a national chain. After his first year in business Mandell also decided to concentrate on Halloween, so that 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, Party City stocked an inventory of Halloween costumes, if for no other reason than to make customers aware of the items for the next Halloween season. One quarter ($560 million) of Party City's 2015 revenue came from Halloween; the company operates about 300 Halloween City pop-up stores.
The first Party City franchise store opened in 1989 in Hazlet, NJ and 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.
In 2009, Party City launched an e-commerce website at PartyCity.com and in 2011 added a “Party Ideas” Center containing shopping checklists, photo galleries and video tutorials.
In June 2018, Party City announced that it would open around 50 Toy City pop-up stores beginning in September 2018, alongside Halloween City stores. The stores will operate through the conclusion of the holiday season. The decision was meant to capitalize upon the closure of the U.S. locations of Toys "R" Us, and some of its locations were utilizing the retailer's vacancies.
In March of 2023, Party City announced that it had filed for bankruptcy due to a combination of factors, including increased competition from online retailers, supply chain disruptions, and declining in-store sales. As part of the bankruptcy proceedings, the company will be closing many of its stores across the country. This news came as a shock to loyal customers who have relied on Party City for their party and event supplies for years.