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Sydnee Gatewood
Sydnee Gatewood
Articles (913) 

Party City Parades Into Toys ‘R’ Us Territory

Retailer to open 50 pop-up toy shops

June 25, 2018 | About:

Following the recent demise and closures of Toys ‘R’ Us stores across the U.S., retail giants like Walmart (NYSE:WMT) and Target (NYSE:TGT) have been looking for ways to snatch up the billions of dollars in sales left behind by the once-popular toy store. Party City Holdco Inc. (NYSE:PRTY) just joined the race.

On Monday, the Elmsford, New York-based retailer of party supplies, decorations and costumes revealed its plans to attract former Toys ‘R’ Us kids by opening 50 “Toy City” pop-up shops alongside its Halloween City pop-up stores. The company said the temporary shops will be in promising markets where it found good leasing opportunities.

In addition, by operating the two pop-up shops together, the company said it will benefit from creating “a concurrent seasonal and toy destination” for customers. According to Bloomberg, Party City generated $54 million of its $2.37 billion in total sales last year from 250 Halloween City pop-up stores.

“The creation of a Toy City concept to complement our temporary seasonal retail strategy is a logical extension of our brand; one that will allow us to leverage our existing pop-up store capabilities and capitalize on the category whitespace that has recently been created,” CEO James Harrison said.

The company plans to roll out the shops in September, when it starts preparing for Halloween, and will continue to operate through the holiday season.

Party City said it also plans to expand its assortment of toys that are available online.

Despite the huge opportunity the company has to benefit from the gap left by Toys ‘R’ Us, investors reacted coolly to the news. After an initial jump, shares of Party City fell 1.41% on Monday morning to $15.68. GuruFocus estimates the stock has risen 10% year to date.

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Disclosure: No positions.

About the author:

Sydnee Gatewood
I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

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