Party City was founded by Steve Mandell in 1986. Steve Mandell noticed that party goods were highly sought after. A large number of retailers carried only limited supplies, and there were no big players in the party market. Mandell decided to specialize in the party supplies business when he realized his long time goal of running his own retail operation. After putting together $125,000, he opened a 4,000 square feet store in East Hanover, New Jersey and named it Party City. The operation was immediately successful and within a year Mandell started planning for a second location. People began asking him to franchise the Party City idea, and as a result Party City began its evolution into a national operation.
After his first year in business, Mandell decided to concentrate more on Halloween than anything else. In 1987 a quarter of his store was turned into a Halloween Costume Warehouse. The operation was highly successful and led to the company's ongoing focus on the holiday. Halloween now had a major impact on the company. October was financially the best year for Party City. Year round, Party City stocked on an inventory of Halloween costumes. This made the customers more aware of the items for the next year Halloween season.
…show more content…
By 1990 Mandell also owned four Party City stores. He incorporated the business as a franchising operation, with his stores forming the core of the business chain. By the end of 1990, there were 11 Party City outlets. Five more franchised stores were added in 1991, 16 in 1992, and 26 in 1993. This brought the total to 58. Party City was now a nationwide chain with locations ranging from Hawaii all the way to Puerto Rico. The company's annual revenues in 1993 were over $2.4 million and the net profits approached $235,000. Today Party City revenue is 47.2