Party City has recently announced that it has come to an agreement to acquire a master franchise group. The leading party goods company will have 11 franchise stores in the Maryland market as represented by the master group.
According to reports, the price of the said acquisition is around $14.0 million. This represents a synergy of various of EBITDA of around four times.
Furthermore, this franchise operator recorded a $26 million for 2017. The retail operations of the company currently includes 803 company-owned Party City stores. Prior to such, the company has 148 franchise stores.
“The acquisition of this franchise group solidifies our position in this highly attractive market.” Chief Executive Officer of Party City James M. Harrison, told reports. “Now have a total of 21 company-owned stores. We look forward to continuing to evaluate opportunities for accretive franchise acquisitions in the future.”
Harrison added that the acquisition was part of the strategy of the company’s brand integrity improvement. More so, he added that this could enhance its operational efficiency while improving the overall customer shopping experience. This could also help on the growth value of the company’s shareholders.
Party City Earnings Report
Party City has also released its earnings report recently. According to Harrison, despite the weak performances recorded during the period, progresses was still visible. More so, the company is focusing on developing key strategic priorities at the time being.
As one of the recorded weaknesses during the period, Same store sales was last seen down at 1.4%. The company adds that sales were flat due to the impacts of the recent hurricanes.
“With fourth quarter results that were in line with our expectations, we achieved 4% topline growth and 8% Adjusted EPS growth in 2017,” James stated.
The net income of the company saw an increase of at least 3.2% to $94.1 million. This is a much bigger record if to compare from last year’s $91.2 million.
“More importantly, we made strong progress against many of our key strategic priorities: expanding the reach of our unique vertical model; improving in-store efficiency and the shopping experience for our customers; elevating our digital capabilities; increasing our presence across multiple alternative market channels as well as in key international markets; expanding our manufacturing capabilities and entering new streams of business through acquisitions and finally, executing a highly accretive share buyback program.”
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