Greeting Gazette Episode 3 Party City Greeting Cards

Episode 3 of Greetings Gazette contains news about Penfield United Methodist Church greeting card ministry, news about IG Design Group loans, blank cards - what to do with your seasonal card rack space over summer, & Rich MacGregor takes A trip to Party City greeting card isle & express his opinion. A full episode with host Paul Chase & Rich MacGregor

Episode Transcript

(00:02):
Welcome to Greetings Gazette, your greetingcard industry podcast. Our monthly show covers
news, tips and tricks up thegreeting card industry and is probably sponsored by
intergreet dot com wholesale greeting cards.Greetings from Los Angeles. This is Rich

(00:23):
McGregor and I'm actually in Los Angelesright now where the weather is beautiful.
We've had a lot of June gloomlast month, but it's sunny and about
seventy six degrees right now now,just for your information, I've been in
the greeting card and allied industries fornearly fifty years. Yes, it could

(00:47):
be true to say that I've spentmy whole life looking at greeting cards,
gift bags and their displays and greetingsfrom Vancouver, British Columbia, can It's
mostly clear today, seventy two degreesand always sunny. That's twenty two degrees
celsius. And I've spent twenty twoyears in the greeting card industry and I've

(01:11):
got a degree in advertising. We'vegot some referrals in today. These are
folks who've filled out the form onGreetingscazette dot com or emailed us at info
at Greetingscazette dot com. Anyone canemail us at info at greetingscazette dot com.

(01:34):
Joe Nicely is opening an independent grocer'sstore in Tussin, state of California.
He's going to be selling food,bear liquor, wine, cigarettes,
all kinds of grocery items, andhe's also looking to sell greeting cards,
so he'll be setting up a carddial and I would pass this information of

(02:00):
on to integreet dot com. Also, we have a lead from David Rogers
from Vancouver. That's where I amopening a gift and greeting card store for
tourists. He sells gifts and noveltyitems, postcards, gift bags, gift
wrap, and greeting cards too,So I would advise David Rodgers to contact

(02:27):
integreet dot com. Okay, well, thank you, Paul. I have
Jade Wilson here and Jade is fromSacramento, California, and she wants to
buy She's in the middle of negotiationsright now to buy a Christian bookstore.
And she does they do have aChristian greeting card line, which is obviously

(02:54):
Dayspring because they're the major operators.Yes, but she's looking at it spanning
their line and that's where that couldbe very interesting for Integreet to get involved
because they have a good line aswell. Okay, well, we've got
a great show tonight. We've gotGreeting Card News, and we've got a

(03:19):
retail report, the Greeting Card News, we've got United Methodist Church and and
with retail report, Richard McGregor wentto Party City. So we'll be talking
about that in a jiffy. Butmy story is about it's taken from the

(03:44):
Courier Express and it's about Penfield,Pennsylvania, a group of women who were
gathering at United Methodist Church to createunique and meaningful lightem data scraps, creating
greeting cards like handmade greeting cards.They still call themselves Penfield Crafters, and

(04:05):
they spread God's love through handmade cardsof their greeting card mission. The person
who runs it is called Sue Kiefer, and she's had her own paper cutting
business and she makes greeting cards outof tea bags and the inside of potato

(04:27):
chip bags, so it's the kindof materials they use for the card.
They sell the cards at their churchand I thought it was an interesting story.
Because they're making their own greeting cards. But you don't have to make
your own greeting cards to have agreeting card mission. A lot of folks
or ministry, I should say,a lot of folks can buy Christian greeting

(04:51):
cards and then mark them up andsell them within their ministry and create funds
for their fellowships and for their ministry. So that that was maybe they sell
a lot of get well, happyBirthday, thinking of you, and sympathy

(05:12):
cards. So just letting you knowabout the Penfield United Methodists really interesting,
Paul, and I want to tellyou about the I got this from from
the Global Atlanta dot com and ittalks about a major greeting card and gift

(05:36):
rap company originally called International Greetings,and they have now changed their name to
IG Design Group, and they arebasically a British gu gift rap and greeting
card company, but they do mostof their business in United States. And

(06:00):
what it says here is that theyhave secured a hundred and twenty five million
dollar loan facility. Wow, that'sa lot of money to recapitalize its US
operations. Now, they used tobe called International Greetings, but it is

(06:21):
now called IG Design Group, Andthere wasn't a lot of confusion in the
USA over the name International Greetings asthe original name of our sponsor. I
don't know if you know this,Paul, but the original name of our
sponsor was also International Greetings, whichthey've shortened to Integreet. But that that

(06:48):
was very interesting. Now what's happenedwith IG Design Group is that they have
they did very badly over the pandemicarea period about two years. They lost
they lost a lot of money andthey went back. So they've had to

(07:10):
recapitalize to their they've restructured their financesso that they can get get moving again
properly. And so they had seventyfive million dollars of that loan came from

(07:31):
HBC USA and the other fifty millioncame from that West, which I believe
is a British company in a Britishbank. But they've got one hundred and
twenty five million and the company aimsto return to pre ademic pandemic operating margins

(07:53):
of six point six percent by twentytwenty five. They stood at one point
eight percent this year, up fromfour percent. No, no, no,
not four percent, up from pointfour percent last year, so they
really have a lot of hard workto do. But they have a new

(08:16):
chief executive officer and I believe thatthey are a good company and they'll do
well. And with that one hundredand twenty five dollars million dollars in loans
on shore that we know setting themback, now I better sell a lot
of greeting cards because that's a lotof money to pay back. Yeah.

(08:37):
Yeah, Now we have a sponsorfrom our sponsor into Greek dot com.
Visit into greek dot com wholesale greetingcards. Into Greek dot com supplies retailers
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product greeting cards are available as bothpremium and discount card lines. A full

(09:03):
line of beautiful greeting card spinners anddisplays is also available. Also, select
from our huge selection of gift wrap, gift tissue, and gift bags.
Make Integreet your new profit center.Visit integreek dot com for your best deals
on wholesale greeting cards. Seasonal updatesfrom Reminders is Paul Chase here. Blank

(09:31):
cards going up on the greeting cardracks. Father's Day is taken down.
Seasonal card slots become available in itsreal season till Halloween or Thanksgiving. So
what a lot of retailers do isthey put up blank cards and they have

(09:54):
some very nice designs from integreek dotcom for blank cards, and they sort
of fill up the space where theseasonal cards usually go. They have a
summer designs. Rich will be talkingabout his trip to Party City in Los
Angeles, California. He went outto find which greeting cardline party City carry

(10:18):
and got a surprise. Well,thank you, Paul. Yes, I
want to share with you about myvisit to Party City in Los Angeles,
who was just last week, manof that couple of days ago, and
now I was really impressed by thechanges that had taken plant place since my

(10:39):
last visit, which was probably aboutfifteen or more years ago. Now,
when I last inspected Party City,they seem to specialize in just about everything.
Now I use the words specialize withmoney quotes very loosely because they could

(11:00):
be called in the old days,party City a discount store for fun filled
activities for adults and children, butnot now. However, they used to
be very profitable. So we needto look at what's happened. To them
over the past few years, theywould cause them to file for bankruptcy,

(11:24):
which they have done as recently asabout four or five months ago. The
New York Post tells us quote SteveMandell, who launched the chain in nineteen
eighty six, pinned the retailer's implosionmeans collapse on a lack of bargains and

(11:46):
variety at its stores, a problemhe claims was created when private equity executives
locked it into a large supply dealwith one manufacturer who they already owned for
roughly eighty percent of its supply.The new owners took out the top two

(12:07):
things that made this company very special, Mandell told the Post in an exclusive
interview. First, we were thediscount party superstore. Today it's not a
discount store. The prices are topdollar. Second, Party City had great

(12:28):
variety, he added. Now thatchanged in about two thousand and five.
According to Mandell, when Party Citywas bought by private equity firms Berkshire Partners
and Western Precido, they also ownedthe party supply manufacturer Amscam, which essentially

(12:52):
gave it a massive monopoly. PartyCity did not did away. They did
away with the competition. The seventyeight year old Mandal said, all of
the innovation is long gone. Thatis a huge problem. A visit will
show that they are a highly organizedspecialty store, and I imagine them most

(13:16):
shoppers could not get out of aParty City without spending two hundred to five
hundred dollars. That's what I think. Wow, that's a lot of money.
With over eight hundred and fifty storesin the USA and Canada, they
would seem on the service to havean excellent marketing plan, but it's not

(13:37):
profitable. Party City are well organizedand have a great deal of themed merchandise.
Of course they must be an amazingoutlet for the majority owners amscam who
make most of the products on displayin the store, but I guess they
haven't been paid. This is thesame concept that Hallmark came up with exactly

(14:03):
one hundred and seven years ago whenJoyce Hall, the owner of Hallmark,
opened his very first Hallmark store.It made sense for him to do this
as they produced in those days thebest greeting cards, so why not have
the many thousands of stores which theyeventually had, selling your products exclusively.

(14:31):
But since the fifties and sixties andseventies. The number of Hallmark stores has
decreased, but they still have overa thousand new stores. And by the
way, that's not a bad wayto sell your own product. So to
focus on to what Party City havedone over the past eighteen years is to

(14:54):
recognize they have made a strong decisionto reorganize their space into themes. For
example, they have a theme ofStar Wars or Disney of Batman. In
fact, just about any character that'son TV or the cinema or licensed products.
Yes, they also have themes onsubjects such as new baby, children's

(15:20):
birthday, adult's birthday, wedding,you name it. They have a wonderful
selection of great goods available for youto select from. But they've also managed
Paul to build up one point sevenbillion dollars in debt, So the concept

(15:41):
of themes must be questioned. Perhapsthe old fashioned way of having the best
variety available in the lowest prices needsto be revisited. What I loved about
their new look is that you canbuy whatever you wanted in a theme you

(16:02):
want to Hawaiian lull, no problem, a baby juror gender reveal. They
can do that. How about anall pink which is appropriate because they're coming
out with that new movie. Howabout an all pink Barbie style theme?
Easy peasy, Okay, well,let's have a first communion party. Let's

(16:25):
be serious. They can do that, or is your child graduating? Of
course they can manage all of thatas well. The major thing that I'd
critique them for is that you canno longer buy green cards or gift bags.
I guess somewhat something had to goto create space for all the balloons,

(16:49):
and they had millions of balloons,party supplies, gift items, cutlery,
costumes, candy, and much muchmore. And these are not produced
by amscam. So maybe there's areason. Greeting cards and gift bags seem
to me to be a logical andnecessary item to add to all your essential

(17:14):
themed purchases. After all, mostparties need a beautiful greeting card or a
gift to put into an attractive giftbag. But the definite direction of party
city is to the organizer of aparty, not the attendee. Perhaps this

(17:36):
is controversial in their marketing push,but I'm a dyed in the wool greeting
card and gift bag marketing guy,so my natural instinct is to include these
items in my display of products forsale. Yeah, well you see greeting
cards and every party, every party. I could not fault the way they

(17:57):
have developed their theme. Let's goback to the first eem I mentioned Star
Wars. You could buy anything associatedwith putting on a Star War themed party.
Plates, cutlery, tablecloths, banners, loot bags, gifts, games.
Anything associated with Star Wars was beautifullydisplayed, and the same for all

(18:21):
the other themes. Believe me,it is on display at Party City.
Party City with this chain of eighthundred and fifty stores who have reorganized their
stores to being fully focused on sellingto those who want to plan and set
up beautifully themed parties. But thismay be a big problem for them,

(18:48):
as the one theme the new ownershave not embraced is a discount theme.
Everything is on sale at top dollar, and I suspect that those who used
to go to Party City to savemoney and now taking their business outwhere.

(19:08):
So my critique is zero wow forgreeting cards, that's a lousy school,
and zero out of ten for giftbags. Meting Party City as they are
today a big loser. In ourJuly review, the biggest loser. Yeah,

(19:30):
well that brings me up to someafterthoughts. I've been thinking a lot
about store brand versus third party brandsor premium brands of greeting cards. And
Party City did have their own storebrand of greeting cards, and I think

(19:51):
they would have been a lot betteroff if they had had American Greetings or
something like that in their stores.The retailers should focus on brand and when
it comes to greeting cards, sothey don't have to worry about what's selling
and what's not selling. They leavethat up to the greeting card brands.
Greetings gazette dot com is our websiteand you can email us at info at

(20:15):
greetings gazette dot com. If youown a retail store and are interested in
adding greeting cards to your store,or if you're opening a new retail store,
greetingscazette dot com and fill out ourform or email us at info at
greetingscazette dot com. Thank you forlistening and make sure you follow our podcasts.

(20:37):
Thank you very much. Bye,