Party City names new CEO
The former CEO of Petco is taking the reins at Party City on the heels of a weak fourth quarter and disappointing year.
Party City Holdco Inc. announced that CEO Jim Harrison will be transitioning to the new role of vice chairman effective April 1, 2020, and will continue to serve as a director of the company. Succeeding him as CEO will be Brad Weston who has served as president of PCHI and CEO of the Party City Retail Group since July 2019. Weston has also been appointed to the company’s board.
Prior to joining Party City, Weston was at pet supplies giant Petco, where he served as CEO from January 2017 to June 2018, and president from 2011 to 2016. Prior to Petco, from 2006 to 2011, Weston was with Dick’s Sporting Goods.
“Over the last two years, the board and I have been focused on identifying the right individual with deep retail experience to lead our Company into its next chapter of growth,” said Harrison. “The board and I felt that now is the appropriate time for me to transition. And in working with Brad over the last several months, it has become clear to us that he has the right skills, experience and understanding of our vertical model to lead the enterprise forward.”
Party City reported a net loss of $501.2 million, or $2.88 per share, for the period ended Dec. 31. Compared to income of $88.5 million, or $1.02 per share, in the year-ago period. Adjusted earnings came in at $0.51 per share, well below analysts’ estimates of $0.88.
Revenue fell to $731.6 million from $805.6 million, which was below analysts’ forecasts of $749.0 million. Same-store sales fell 5.1%, more than expected.
For the full year, total revenues decreased 3.2% to $2.33 billion. Retail sales decreased 3.4%. The company credited the decline principally due to the negative impact of helium shortages, the sale of 65 Canadian retail stores prior to the Halloween season, the impact of reduced sales from 55 stores identified for closure in conjunction with its 2019 store optimization program, and soft Halloween sales at Party City stores and temporary Halloween stores.
“2019 was a challenging year due to a confluence of events, including both external headwinds and execution issues, that impacted both sales and margins,” stated Harrison. “As we look ahead, we are taking actions in our retail business to improve our operating model and performance, which is at the core of our plans to return our total business to growth. We will continue to focus on executing against our strategic priorities, keeping the customer at the forefront of our decision-making process across areas including product development, merchandising, marketing, store and online operations.”
Party City closed 35 Party City locations in fiscal 2019 and, after the year end, closed another 20 stores. It ended the year with 777 company-owned stores and 98 franchise stores.