Party City to reduce corporate workforce by 19%

Party City is cutting back.

The party supplies retailer said it would reduce its corporate workforce by 19% through both job cuts and by not backfilling “a significant number” of open slots.

The move comes as Party City said its core customer is facing “significant inflationary pressures” and as it reported Halloween sales results that, while up year-over-year, came in at the lower end of its expectations.

“Looking ahead, we anticipate the current macro backdrop to persist and are taking action to best position the business in this environment and for the longer term,” stated CEO Brad Weston. “We will continue on the path of progressing our transformation strategy but will be addressing structural cost opportunities and increasing operating efficiencies given the challenging environment.”

Party City’s total net sales for the quarter ended Sept. 30, fell 1.6% to $502.2 million. Total retail sales decreased 1.0%, primarily driven by lower sales of core product in everyday categories and the lapping of strong prior-year retail results as well as the impact on demand from the current inflationary environment, which was partially offset by solid performance in seasonal categories, according to the company.

Party City is looking for $30 million in cost savings. In addition to the workforce reduction, savings are expected to come from retail store “efficiencies,” marketing, professional services, logistics and operational costs and other areas, according to executives on the company’s earnings call.

There were 761 Party City stores as of September 30, 2022, compared to 754 in the prior year period.