Julie Roehm, Party City's chief marketing officer, has left the company just weeks after Fitch Ratings downgraded the retailer, citing "the rapid deterioration in Party City's operating and liquidity profile."
Fitch says the company, due to an unwieldy debt structure set to mature in 2025, may default unless it can meaningfully improve operations in the next 12 to 8 months.
"Party City's capital structure is likely untenable," it writes in the downgrade. "The company has limited liquidity headroom to navigate further operational missteps."
Party City posted a quarter of declining sales early in November and said it would eliminate 19% of its corporate workforce.
Revenues for the Woodcliff, New Jersey-based retailer, dropped 1.6% in the third quarter, to $502.2 million, while comparable sales fell 3.2%. And its October sales, which include Halloween -- typically its most profitable day -- came in flat.
"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," said Brad Weston, chief executive officer, in the company's earnings release. "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 is aiming for a $30 million reduction in costs, including workforce reductions.
Roehm tells Marketing Daily she can't yet say where she is headed. In a post on LinkedIn, she thanked her colleagues. She explained how she enjoyed the chance to help "create a vertically integrated company—and move from simply selling SKUs to delivering the entire party solution. "
Roehm, who joined the company in December 2019, writes the Party City spot was a "dream job" and bragged about the team she built while there, delivering on the "Making Joy Easy" transformation effort.
"While it is bittersweet, I leave the work in great hands. I am so proud of all that we accomplished in the face of constant adversity."
Party City, which has 761 stores, expects sales for the full year of between $2.14 billion, which would be a 1% decline, to $2.19 billion or a 1% gain. And it expects comparable store sales to fall between 1 and 3%.