San Francisco Business Times

Party America Celebrating booming business at its stores

By Kristen Bole

A little partying never hurt a business. At least that’s what Marty Allen has found in transforming a small company on a downward spiral into the second-largest party retailer in the United States.

Alameda-based Party America has clocked 180.5 percent growth over the past three years, not counting the $50 million in sales from its franchises. The company listed $167.5 million in revenue last year, up from $111.8 million the year before and a mere $59.7 million in 2003. And that’s in an industry in which shelves need to be nearly full the day before Halloween – but that same inventory has zero value the day after.

“Retail is hard,” said Allen, Party America’s President and CEO. “Trying to keep the right products all the time in your stores is very challenging.”

Clearly the company is up for the challenge.

Party America has grown from 24 stores to nearly 300 nationwide, while building its staff to 2,400 in the main company and another 600 in its 60 franchises. That’s a far cry from the Chapter 11 bankruptcy that Allen filed when he first bought the ailing 24-store company a decade ago.

“The plan was to fix the company and exit by selling to one of my competitors,” said Allen. Then the industry took a downturn: “I ended up buying two of my competitors instead.”

His secret is threefold. First, put a good team in place. Then make the stores a nice place to shop. And finally, make it a fun place for employees to work.

So they started with carpet on the floor and bigger stores. They made the aisles wider for women with strollers. They keep the bathrooms clean, decorate them for every holiday and give a highly coveted award for the best restroom in the company. Allen himself takes every customer call that comes into the office and reads every customer email.

And for staff, they offer free popcorn and try to have fun. They train well and hide nothing: Every staff member can know as much about the company’s goals and direction as they want to learn. Marty Allen

“There’s nothing you can do today that’s 100 percent better than your competition, and if you do find something, the day after you start it, your competition will leapfrog it. Winning in business today is doing 100 things 1 percent better.”

He cited Nordstrom as a role model. Its products aren’t that different from the competition, but it has comfortable chairs for people to wait, it has live music on grand pianos, and it even makes the radical move of putting the men’s restroom near the men’s department. Independently, none of those things makes Nordstrom a success, but together, they give it an edge.

That’s the kind of edge Allen strives for at Party America.

He said that he was in one of his stores a few years ago when he saw a customer rush out of the women’s restroom. She grabbed her friend and dragged her in to see it.

Said Allen, “I thought, ‘We have arrived as a retailer’.”