Iparty (AMEX:IPT)
Historical Stock Chart
From Aug 2019 to Aug 2024
![Click Here for more Iparty Charts. Click Here for more Iparty Charts.](/p.php?pid=staticchart&s=A%5EIPT&p=8&t=15)
iParty Corp. (AMEX: IPT - news), a party goods retailer
that operates 50 iParty retail stores, today reported that it has
entered into a five-year Supply Agreement with Amscan Inc. ("Amscan"),
its largest supplier, and has also entered into a $2.45 million
agreement with Party City Corporation ("Party City") to buy a retail
party goods store from Party City in Peabody, Massachusetts and
receive a five-year non-compete agreement from Party City covering
most of iParty's core market in New England. iParty also announced
that during the months of June and July 2006, two different
competitors had closed a total of five retail stores that had
previously competed with five different iParty store locations in New
Hampshire and Massachusetts.
On August 7, 2006, iParty and its wholly-owned subsidiary, iParty
Retail Stores Corp., entered into and simultaneously closed an Asset
Purchase Agreement with Party City, an affiliate of Amscan, that
provides for, among other things, the acquisition of a Party City
retail party goods store in Peabody, Massachusetts, for aggregate
consideration of $2,450,000, payable by a note in the principal amount
of $600,000 and $1,850,000 in cash. The Agreement also provides that
Party City and its affiliates will not compete with iParty in
Massachusetts, Rhode Island, Maine, New Hampshire, Vermont, and
Windsor and New London counties in Connecticut for a period of five
years, subject to certain terms and conditions.
On August 7, 2006, iParty also entered into a Supply Agreement
with Amscan, its largest supplier and the largest supplier in the
party goods industry. The Supply Agreement gives iParty the right to
receive certain additional rebates and more favorable pricing terms
over the term of the Agreement than what is generally available to it
under its current terms with Amscan, subject to iParty's achievement
of increased levels of purchases and other factors. In exchange, the
Supply Agreement obligates iParty to purchase increased levels of
merchandise from Amscan until 2012. The Supply Agreement provides for
a ramp-up period during 2006 and 2007 and, beginning with 2008,
requires iParty to purchase, on an annual basis, merchandise equal to
the total number of iParty stores open during such calendar year,
multiplied by $180,000. The Supply Agreement also provides for Amscan
to extend, until October 31, 2006, approximately $1,150,000 of certain
currently due receivables owed by iParty to Amscan, and gives iParty
the right, at its option, to convert these extended receivables into a
three-year subordinated promissory note. iParty currently intends to
exercise its option to convert these extended receivables into a note
in October 2006.
Sal Perisano, Chairman and Chief Executive Officer of iParty
Corp., commented, "Each of these transactions presents iParty with a
significant opportunity. First, we are acquiring a high volume store
from a competitor in the important Peabody, Massachusetts market where
we don't have a store. Secondly, in connection with this store
acquisition, the nation's largest chain of party supply superstores,
Party City, has entered into a five-year non-compete agreement with us
that covers most of our core New England region. Third, our Supply
Agreement with Amscan, which extends to 2012, affords us the
opportunity to realize better product margin and improved business
terms with our largest supplier. These transactions with the largest
supplier and the largest retailer in our industry are encouraging
evidence of the respect that those in our industry have for iParty's
overall business performance and the strong market position that we
have been able to achieve in our core New England area. We believe
that both of these transactions are excellent business opportunities
for iParty."
Mr. Perisano further commented, "Finally, we are also encouraged
by and happy to report that over the past two months two different
competitors have closed a total of five retail stores that had
previously competed with five different iParty store locations in New
Hampshire and Massachusetts. We believe that these recent store
closings further validate our overall business performance and
strategy and present us with important opportunities to improve our
market position and sales at our five nearby locations. We are
evaluating and adjusting our operational and strategic plans
accordingly."
About iParty Corp.
Headquartered in Dedham, Massachusetts, iParty Corp. (AMEX: IPT -
news) is a party goods retailer that operates 51 iParty retail stores
and licenses the operation of an Internet site for party goods and
party planning at www.iparty.com. iParty's aim is to make throwing a
successful event both stress-free and fun. With over 20,000 party
supplies and costumes and an online party magazine and party-related
content, iParty offers consumers a sophisticated, yet fun and
easy-to-use, resource with an extensive assortment of products to
customize any party, including birthday bashes, Easter get-togethers,
graduation parties, summer barbecues, and, of course, Halloween.
iParty aims to offer reliable, time-tested knowledge of party-perfect
trends, and superior customer service to ensure convenient and
comprehensive merchandise selections for every occasion. Please visit
our site at www.iparty.com.
Safe harbor statement under the Private Securities Litigation
Reform Act of 1995: This release contains forward-looking statements
that are based on our current expectations, beliefs, assumptions,
estimates, forecasts and projections, including those about better
business terms, future expectations of sales growth, improved gross
margins, profitability, the ability to take advantage of business
opportunities, and the industry and markets in which iParty operates.
The statements contained in this release are not guarantees of future
performance and involve certain risks, uncertainties and assumptions
that are difficult to predict. Therefore, actual outcomes and results
may differ materially from what is expressed in such forward-looking
statements, and such statements should not be relied upon as
representing iParty's expectations or beliefs as of any date
subsequent to the date of this press release. Important factors that
may affect future operating results include, but are not limited to,
economic and other developments such as unseasonable weather, that
affect consumer confidence or consumer spending patterns, particularly
those impacting the New England region, where 45 of our 50 stores our
located, and particularly during the Halloween season, which is our
single most important season; intense competition from other party
supply stores and stores that merchandise and market party supplies,
including big discount retailers, dollar store chains, and temporary
Halloween merchandisers; the failure of any of our systems, including,
without limitation, our newly-installed point-of-sale system and our
existing merchandise management system, the latter of which was
developed by a vendor who is no longer in business and which we are
considering replacing in 2007; the success or failure of our efforts
to implement our business growth and marketing strategies; our
inability to obtain additional financing, if required, on terms and
conditions acceptable to us; rising oil and gas prices which impact
prices of petroleum-based/plastic products, which are a key raw
material in much of our merchandise, affect our freight costs and
those of our suppliers, and affect consumer confidence and spending
patterns; third-party suppliers' failure to fulfill their obligations
to us; the availability of retail store space on reasonable lease
terms; compliance with evolving federal securities, accounting, and
stock exchange rules and regulations applicable to publicly-traded
companies listed on the American Stock Exchange. For a discussion of
these and other risks and uncertainties which could cause actual
results to differ from those contained in the forward-looking
statements, see Item 1A, "Risk Factors" of iParty's most recently
filed Annual Report on Form 10-K for the fiscal year ended December
31, 2005 and iParty's most recently filed Quarterly Report on Form
10-Q.