Party City named a new chief operations officer to optimize its supply chain as the retail chain shifts into cost-cutting mode.
Peter Smith, formerly executive vice president of global supply chain for children’s retailer Carter’s, will lead Party City’s efforts to increase efficiencies throughout the company’s operations, President and CEO Brad Weston said in the company’s Q3 earnings call.
Weston said Smith will oversee initiatives related to “manufacturing, sourcing, inventory optimization and supply chain efficiency.”
The new appointment comes as Party City moves forward with a $30 million cost-cutting plan to offset the impacts of lower demand and inflationary pressures.
The company will cut its corporate workforce 19% and is looking to reduce costs associated with raw materials, logistics and operations.
“We expect to enter 2023 and this next phase of our evolution as a leaner, more efficient organization,” Weston said.
The party goods retailer has seen soaring helium costs in particular as the gas remains in tight supply following the temporary closure of the U.S. Bureau of Land Management’s Crude Helium Enrichment Unit’s plant. That facility, which restarted in April, is responsible for supplying 40% of domestic helium demand.
Party City diversified its supplier base and entered into long-term agreements to maintain supply. The retailer faced $20 million in extra expenses related to helium in FY22, with executives noting on the earnings call that supply has taken longer than expected to recover.
“We've just seen a lot in the way of supply chain pressures probably beyond what we would have initially forecasted,” said CFO Todd Vogensen.