We Fixed It. You're Welcome.

Aaron Wolpoff [0:14 - 2:06]: Here's how this works. In each episode, we pick a company we all know that has something going on right now. Then we put ourselves in charge and see if we can fix it. You'll be hearing from Melissa and operations, Peter on finance, Chino on people and culture, and me on marketing. My name's Aaron. As always, a quick disclaimer. We are going into this somewhat cold and nothing we say should be construed as legal advice, financial advice, or anything that would get us in trouble. These are our views and opinions. We're here to ask the kinds of questions everyone's thinking, have an engaging conversation, and maybe come to some conclusions that we feel are worth exploring by the end. If we fixed it, you. You're welcome. All trademarks, IP and brand elements discussed are property of their respective owners. First up, I want to say a heartfelt thank you to everyone who's been tuning in and spreading the good word. We've been picking up listeners left and right and it's because of you we're being called. Refreshing, excellent, great. So different from other podcasts. And there are a lot of worse things to be called. So thank you. And because of you, our new little show has well over a thousand downloads and we're getting guest inquiries, all the good things you want to hear about. So if you want to suggest a topic or reach out to our team, we're@wefixeditpod.com I want to mention we are without Peter today, who's our financial expert. But fear not, you have the fearless trio of Chino, Melissa and myself. In this episode, we're going to look at the unexpected bankruptcy and closure of Party City and the bigger challenges that are facing malls and retail centers in this day and age. Does it make sense for specialty companies like Party City to still have a large retail footprint? And if so, what does it take to survive when a company like Party City goes under? Is it just another isolated incident or a wake up call? And more importantly, what are we going to do about it? And what are we going to do with all that empty retail space? As always, it's up to us to fix it. So let's get into it. Let's talk about Party City. Any memories or recollections about Party City?

Melissa Eaton [2:06 - 4:04]: Well, an interesting, more current Party City story. It has to do with my middle daughter who went viral on TikTok for a ghost she believes in. Know. So anyway, Chad the frat ghost and Party City reached out to her last Halloween, not this last year, but two years ago, and asked to do A collaboration with her and they paid her to do shoot two videos and they also gave her a thousand dollars worth of credit in a Party City store or online, which if you know and have been to Party City, I think that's about everything in the store. So that was a lot. She did two really fun videos. She, you know, neither one of them went hugely viral compared to some of like the other videos that she's had like 6 million hits or something like that. But I thought it was interesting because I think we'll get into this topic of seasonality and how Party City was very focused on the seasons because that's when parties happen. So like Halloween being one of their biggest seasons, but maybe not keeping in mind the competition which is so important because one of the things my daughter did was have the ghost choose which costume he liked best. And so she went and got some costumes from Party City and her comment to me after the fact was that she felt the costumes from the Halloween spirit store pop ups were much more relatable to what, you know, people want today. So I thought that was an interesting thing because I think we're going to be talking about what got Party City to where to this bankruptcy stage and I think this focus on the seasonality but also maybe not keeping your eye on the ball and why your competitors are doing so much better than you are.

Aaron Wolpoff [4:04 - 5:52]: Yeah, well, good point about seasonality and about relevance. Party City was a, was up till recently a pretty big powerhouse if we go into the history. It was founded in 1986 in Woodcliff Lake, New Jersey, became the Go to retailer, you know, the name brand, right, for party supplies and costumes, decorations. Over 800 locations at its peak. And like you mentioned, Spirit stores became part of the national conversation every Halloween because of the costumes and the decor and the what have you. But even in off peak seasons you'd go in for a mix of party supplies or balloons or birthday favors or candy and novelties, that kind of thing. And then even up to pre Pandemic was performing well financially, reached revenue about 2.35 billion in 2019. But since then it's been facing debt Pandemic era supply chain issues that maybe it didn't recover from and we'll get into it, but changing consumer behaviors and you know, we'll talk about all that stuff. So filed for bankruptcy January 2023, came out of it, September went from 7, 850 stores to around 700. Bankrupt again by the end of 2024. And now it's a daily news topic. But all stores are expected to close by February, with current plans to auction off the remaining 695 stores in the U.S. including 26 in New Jersey, where it all started. So kind of a sad end for what you call a retail mainstay. Well, let's talk about it. What, you know, what, what happened, and we can talk about, you know, what are we here to fix. What kind of situations can we turn Party City around, or is it, you know, endemic for other retailers and that type of thing? Should we all be paying attention to this? I think we should.

Chino Nnadi [5:52 - 7:46]: I think we should. And what's really interesting with Party City and kind of my background and experience with that would be I go to Party City every single time I'm hosting some type of event. I'm having a dinner party. I don't want to wash dishes. You can go to the Dollar store, I can order it on Amazon. But if you're like me, who's someone who does things very last minute, I'm always running to the store two hours before an event to kind of get those remaining stores. And there's a lot of us that are there. And so it's sad, especially being in Canada where we have a few Party City locations that are huge in size. Right. We don't have as many or as high a number as you would in the States, but the ones that are in Canada, specifically in Toronto, the three main cities that I'm thinking of are mega stores. And so it is really helpful when it is those peak times like Halloween, Christmas, any other times that there's a birthday, which is essentially every other day, it looks to be quite packed. But the challenge that I'm finding is, you know, the dollar store, obviously spirit, Halloween during Halloween. And Amazon, frankly, if you can literally plan like a day or two ahead, it's often cheaper to go on Amazon. And so it begs the question, do you need these mega, you know, retail locations to hold products, as you said, Melissa, that maybe aren't the most up to date? And sure, there's some novelty things, but it's not what consumers are necessarily looking for. So it's interesting. I do think it's going to be a challenge not just for specialty stores like Party City, but looking at retail in general.

Melissa Eaton [7:46 - 8:33]: Yeah. You know, one of the things that I was thinking about when we, we talked about this was what are the operational opportunities for adapting some of these empty retail spaces as well as what have other big retail box stores like, you know, like the party cities done to overcome this? And I was doing some research on this and it was funny because I was actually just at my local Barnes and Noble. And Barnes and Noble has actually been a great story that they have transformed kind of that big bookstore thing. So, you know, Borders went under. There was this whole thought that, you know, Barnes and Noble was going to as well, because Amazon Books, you know, Amazon was, was killing it. You don't have to go anywhere to.

Chino Nnadi [8:33 - 8:33]: Get a book, right?

Melissa Eaton [8:33 - 11:56]: You can just go online. And so it was interesting to hear what the new CEO talks about. And the way he addresses the business and the way he addresses it is he looks at it as an experience and he looks at it as a creative space that should be own by the local management of that store. So he said they know best the customers who are actually walking through that door. And it was interesting because he was, they were talking to a manager at a New York store, for example, and she was saying that pre, this gentleman, he came from a British book chain, so I think it was called Daunt, Dauntless or something like that. And he said that, that they said they would be told what books to put on what tables, where the tables were to be located and to what degree and angle the tables needed to be shifted towards. I mean, it was all laid out for them, architected for them. And then when you look at the book, the Barnes and Nobles, for example, in New York City now, the neighborhoods might make it look and feel like almost like a local neighborhood bookstore. They'll cram it with a bunch of books that they think are going to be very interesting to the locals, including what might be around that, you know, that locality. So if it's a hot restaurant, I'm making this up. But if it's a hot restaurant area, you know, maybe they're going to have a bunch of different types of cookbooks and they're going to have pop ups with authors, et cetera, et cetera. So I think that that is one way of addressing the competition. And what we were talking about with Party City is they've had a great model that Chin. You and I, you know, we, you know, when you have kids, Party City is the place to go to get the little party favors. I do want to say whichever mom created the party favor bag, I want to kill her because that not the point of. But okay, but Party City did a great job with that. Like you could go into an aisle and just pick willy nilly and have everything ready to go. But my, I, you know, my thought to them, now it's too late obviously, but would have been to transform that party experience and maybe have it be like a creative space on how to throw a amazing dinner party. Right. And have a table set up and actually have the Party City employees be party planners. And you could go to one that's like I do I mention I'm a specialty party planner for birthdays 10 and under. So I'll tell you what's the hot thing everybody wants, you know, Captain America or whatever, you know, and then you would have it all ready to go. Or you could learn because I really feel like Etsy, Pinterest, all of these things. If you look on TikTok now, everybody's doing it yourself DIY and so maybe it needs to be something like that where they have these diy like wedding shower, you know, all the different types of parties. And you could have events where you're actually showing people or actually posting these online and showing them exactly what the, the items were that you were using.

Aaron Wolpoff [11:56 - 13:06]: Yeah, I'm with you, Melissa. You, you're talking about 10, 10,000, 12,000, 15,000ft of retail space. That's a lot of space for napkins and party hats. Right? I, I was kind of thinking along the same lines as, you know, I was there in, in November. I was last in the Party City. And it was right if it's cold and you know, you could be anywhere, you could be at a hardware store. And when you have a brand, you own all the elements of the brand, including the name and including everything that it could represent. And I always wondered with something like Blockbuster, if they were about the, you know, too late to save them, but unless they make a comeback. But they were about the theatrical experience and the love of moviegoing. And I always wondered, could they have become little like pop up theaters inside of a mall, you know, and, and run these little, you know, odd time, have to be there to, to enjoy it type of theatrical experiences in the middle of a store, Wouldn't that be kind of cool? So rethinking if they're, they're all about movies, but Party City is all about parties. Why don't you feel like you're at a party when you walk in the room? You know, they own that or they could, right?

Melissa Eaton [13:06 - 14:21]: And from a customer experience perspective, like I said, Chino and I are great examples of this. You know, we want it to. Maybe we know in our head what we want, but like, I can't think of everything. Right. And so wouldn't it be great that if you could walk into it and say, okay, this is for a baby shower. And I Know, there are way better baby shower ideas and favors and games and, you know, plate. Paper plates or whatever. And if they have that already set up for you to see, and then you could pick what you wanted and. And it would be really easy, and it'd be all packaged. I mean, I would love that because it's the ease of that. And you think about all the things that are happening today with like, you know, gender reveals and everything like that is like, have they moved away enough? They hadn't moved away enough from, like, you know, the birthday parties for kids and the helium balloons. And then there was the helium shortage, which was crazy. But, yeah, there's that. So there's just a lot of business things to think of. Chino, I wanted to ask you, though, a people question, because one of the things about this has been the way they announced it, especially to their own employees, was just, we're shutting down.

Chino Nnadi [14:22 - 17:36]: Yeah. And it was right before the holidays. So could you imagine where your whole brand is? Party and celebration. And right before, arguably the biggest celebration, everybody's waiting for that holiday to shut down. It's devastating in any way to be let go before a holiday, but especially in a company where your brand is holding onto, you know, being a part of a party. And so, you know, it is very hard, I understand, as business leaders, to make those calls, like, you are impacting thousands of people's lives and like the trip trickle effect from that. But as we mentioned, as you mentioned earlier, Aaron, they've already filed for bankruptcy. Earlier. Earlier was the last year in 2023. And so they're. They knew this was coming. This is not. Oh, this just happened one day and we didn't know the numbers and whoopsie. This was a very planned, very strategic move. And to move into the new year saying, we're done. It's a challenge. And I think that, sure, you can take the approach of being kind of removed from the situation, and I just think it's the coward way to go. I'm gonna. I'm gonna say it. I'm sorry to every. I know there's lots of layoffs happening, but you don't need to be like everyone else. And I feel like we've become so desensitized to layoffs that when you hear an announcement like this, it's like, meh. It's a part of all of the many other layoffs. And I just think, again, the world is small. People will move on and they will find other opportunities. But as those managers, as those people who were, you know, Responsible for those people. There is some form of responsibility you need to take and if you can at least go the high road with that. And I hope that they had a hefty severance package because again, you knew this was coming. I hope you weren't doing hiring ahead of time, which again, a lot of companies do, where sometimes their job posts are still up. And so it's really important to think about the human aspect of this obvious time of year is really important. I think it wasn't the best move to do that. If they had announced that come, you know, end of November after their peak season being Halloween, that would have been a better time to do that so that people can at least have a bit of approach going into the holiday season versus hearing this. I think it was two days before Christmas, which is heartbreaking. And at that point, no one's hiring, no one's doing anything. Everybody's logged off. So you've put people in a very weird position where come January 6th, when everyone's kind of back from vacation, they have to kind of, you know, fingers crossed and hold their breath until that time is there to actually make any type of moves to look for new opportunities. So again, I just think there's a more human way and approach to do this. And I just would love to see more companies going that way versus taking the cowards route and just cutting people like they're just numbers.

Melissa Eaton [17:36 - 19:22]: Well, and I would imagine that with their store employees, most of those store employees are hourly. So I would think that even in a best case scenario, their severance packages would be fairly minimal. My understanding was that there was not any of that, but I don't know. And to your point, I wonder if they did this also to even that small amount of severance. Let's just say it's. It's not, you know, their debt was over a billion dollars, so it's. Let's just say it's, you know, $100 million or whatever that, that they were hoping that people would just come back and quit. Because, you know, if you're working retail at Party City, I mean, I'm gonna try to go get another job somewhere else. I'll go to Whole Foods. I'm gonna go to, you know, Hobby Lobby. I'm gonna go to Dick's Sporting Goods. I'm gonna go somewhere else. So to me, I think you hit it on the head though, is that the human aspect of it is somewhat ignored in these kind of very abrupt announcements, as if it's not the holidays. As if everybody doesn't have a life that's going on right then. So I mean, I appreciate that, Chino, because I think calling out the cowardice in it is really important because that's not just Party City, it's everybody. There have been so many layoffs this year and there have been so many things that point in a different direction where the CEO is bonused millions and millions of dollars or stock options and you know, and yet, you know, entire teams are being decimated. And that's really, that's really a frustrating sign. And just so someone's stock can go up or whatever, you know, that's just. It's just frustrating.

Chino Nnadi [19:23 - 19:24]: It is.

Aaron Wolpoff [19:24 - 19:25]: Yeah. Go ahead.

Melissa Eaton [19:25 - 19:26]: It is.

Chino Nnadi [19:26 - 20:36]: And what was interesting too, I believe they let go of a lot of their executives ahead of time as well. So the executives actually got let. Let go. Not the executives, but leadership. People in kind of the office versus retail stores were let go prior to the retail store workers because they still needed people, you know, on the job. And it kind of brings up the point of how do you keep that momentum right from a cultural perspective. Like I think we brought up some incredible ideas of how we could have reinvented Party City and make it a place and really experiential, focused, you know, really catering to a do a do it yourself crowd. But you know, with the people like me who are still very last minute and need to run and maybe don't have the time to build a Pinterest board. And so I think there are so many opportunities and I would love to, you know, I know it's a very hard decision. It's. We're kind of past. The ship has passed in a way. But I would love to talk about how other specialty stores can maybe learn from Party City and how they can, you know, stop the ship hopefully in its tracks and kind of steer to a different direction.

Aaron Wolpoff [20:36 - 21:31]: Yeah, well, I think it goes back to owning, you know, the core aspects of your brand and not being afraid. You, when you're in buried and in survival mode, you know, you try to turn on as many blue forks as you can, I guess. But when you have a moment to sit above it and say, look, if we sell another gross of blue forks, is that going to turn us around or do we have to rethink our model, put the, put the brakes on for a second. And I do wonder, Melissa, I don't know operationally if this we could. Would whatever fly, but you know, we're throwing out ideas. Could Party City have become a party venue after hours and use 10,000ft of space and, you know, you rent it out and there's all of a sudden a new revenue stream, and then the stores are tailored accordingly. Like, could they have rethought what they stand for and, you know, what's at the core of their business model? Could that potentially fly as, you know, another way of staying viable?

Melissa Eaton [21:31 - 24:38]: I think that's a great example of thinking outside of the box and thinking about your customer experience has transferred or transformed over time, as well as the need for operationally for you to have very discipline and rigor. I mean, I know those are kind of corporatey, jargony words, but it's really true. So they, when they came out of the bankruptcy the first time a year ago, their debt was still at a billion dollars. I mean, a fork, Agrosa forks, that's not going to cut it, right? So you really needed strategists to come in to transform the entire operations. And I think you kind of hit it, Erin, like, what are the kinds of things that people are paying for today? And like I said, what kind of partnerships are they having? I mean, partnering with my daughter was a great idea, but they really could have maybe partnered with bigger venues. Right? Like, if you think about it, like, I. She know, I don't know how old your kids are, but, like, I remember when laser tag parties were a big thing, okay. And I always used to laugh, you know, Martha Stewart Living. I was like, my, my Melissa Eaton would be buying because I just, I don't have time to do all that stuff. And I loved that the laser tag place started to evolve. So you could buy the entire package. Like, they asked you, like, what kind of. What kind of room do you want to have? Is it a girl? Is it a boy? Do you want, you know, balloons? Do you want a cake? You know, do you want us to do pizza? We will do all of it. And like, I loved it. I was like, I'm. Sign me up. Here's my credit card. But, like, if they could do something like that, they could have, you know, partnered with some of these venues and they could get some branding acknowledgement and marketing acknowledgement, and they could, you know, sell and they'd have this constant flow to these. To these places. I mean, I think the partnerships that they probably weren't thinking they needed other places to go to partner when they actually probably really did. And I do love that idea of creating event spaces because right now, events, you know, now that we're out of COVID event spaces are a big thing. And I recently went to Event space. And that's all it is, is an event space. And you go. And it feels a little warehousey. But like, depending upon what the. The thing is, you bring in, you know, sports memorabilia or you bring in, you know, quartet or whatever you want, and you make it what you want. And I think that they miss that opportunity to kind of look at the broader picture and also not just focus on what was the blue fork, it was the Halloween costume. When you know, if you think about the spirit stores, they're not paying rent except for two months, right? Right. They're paying for September and October. Like, you see them, like, it's always interesting to me where they pop up. Like you're like, oh, wasn't that like a little gym over there?

Chino Nnadi [24:38 - 24:39]: What happened?

Melissa Eaton [24:39 - 25:59]: And it's like this Halloween store, right? And they don't even need hardly any. They put one billboard on the freeway and then everybody's there, you know. So I think that, like, when I look at, you know, and look at the way that their inventory was laid out too, they had stuff, they had to have every color of fork. Right. And do you really. Right. You know, like, that's the kind of thing that probably they got caught up in and then they just didn't really think about that later. I think that the, the owners of the space. One of the trends that commercial realtors are talking about is those there's a lot of retail space that is being freed up and they're focusing on what they're calling the four Fs, which is kind of funny, which is food, fitness, fun, which is experiential things like we were talking about pop ups, things like that. And then physicians, which is not really F, it's ph, but medical, like med spas, medical urgent care centers. There's some talk about furniture and furnishings, but that seems a little weird to me because I don't know, do people, I guess people still go to furniture stores, right? Yeah. Yeah.

Chino Nnadi [26:00 - 28:14]: What's interesting. What's interesting to me is I want to talk about the competitors, right? So you have Spirit Halloween who have brilliantly found a way to not pay the retail, you know, cost and kind of override that, which is brilliant. And then you also have Amazon, where you online shop. Right. And it comes to you two or three days later. Again, you need to be a little more proactive. So for the last minute, shoppers like me, it's not great. And I think where any specialty store that has a big event, the reason people come in. Same thing with the furniture shop. Right. I'm doing all my research online. I have laid out what mattress I want. But you know what you can't do online is feel that mattress. What I need to do is if I'm you know, planning a wedding or a baby shower and I don't have the time to put together this beautiful, you know, balloon thing or you know, what, what's the latest and greatest decoration and decoration or what did the seven year old boys love for their birthday parties? That's what people come into a store for. And I think it's going to be very important for any store to remember that nobody is shopping online not knowing what they want, right? We're browsing online, we know that's what the consumer is doing. The people who are walking into a retail store are looking for the experience. They're looking for the feel and touch. They're looking for that experiential as a brand. You need to have that in mind. People can order it online. How many times have you gone into a store where they might not have the stock? So maybe, you know, you had three different types of pink forks and I needed maybe a rose gold. I can order that online and if I need it, maybe you have some in the back. That's not what I'm there for. I'm there to either pick it up quickly or to experience something. And I think any store, especially a specialty store like Party City, where they have huge amounts of space, need to reimagine how they can bring that experiential to life.

Melissa Eaton [28:14 - 29:58]: I love that because that's actually one of the things that Barnes and Noble talked about. They said Amazon is always going to have, I think they have like 58% of the book market, okay. But the CEO said they don't have that experience. So when you walk in to and you can feel a book, you can smell the books, you can see them, right? You can see all the books that are like this murder mystery that you love, right? You know what I mean? And you can like it's, it's just an experience. And I think about like the last time I went to Barnes and Noble I was looking for a very specific book and I went in and of course they didn't have it, which they were like, oh, we can order it for you, blah blah blah. And I was like, well I don't know if I want to order it, you know, because I was like I'll just go order it on it. And then the, the woman helping me said if you like that kind of book, this is my absolute favorite Book of the year. And I was like, really? And so I bought it. And you know what? I've now bought three other books by that same author because I absolutely love that book and I would have never known about it if I hadn't met this young woman who was working at Barnes and Noble that day and she just was trying to help me. Yeah, so I agree with you, Chino. I think that there's something about that personal connection that can't be, you know, you can't substitute. But Aaron, I would have a question for you. And I know that Peter's not here, but do you think there's a possibility that Party City would come back in a different form, format, like, like Toys R Us did, where they went, they closed all their stores and then Toys R Us is slowly like somehow coming back, which is interesting to me, but good.

Aaron Wolpoff [29:58 - 31:13]: I, you know, I really, I don't think they could come back as a commodity without the curation. Right. Like we were talking about. So if I'm going to walk into what feels like a warehouse and I'm going to go walk to the wall and pick out what I need and maybe someone will begrudgingly help me, that's not a business model. If we're going to go more into the party planning expertise and maybe, you know, you do a minimum spend and you have a built in party planner and you leave it to us and we're going to create the party for you and there's something to it. Right. Who else is doing that in a, in a retail mall environment? Maybe there's something there. Maybe there's something to the after hours venue or that you would go in for. You'd spend $40 on a Halloween costume, but would you spend $150 on a Halloween experience in real time, you know, in person? Not to say these are a waste of space. There's could be, you know, something viable there. But even, even, you know, companies like TJ Maxx are talking about experience and the thrill of the hunt and, and in this day and age have little to no E Com. Right. You have to be there. So I think that's what Party City would need is something where you, you have to physically be there to take part in what they're all about.

Chino Nnadi [31:13 - 33:00]: Agreed. And Aaron, I think you bring up a really good point too. You don't need a sales associate that's begrudgingly there. And I think, Melissa, to your point, when you were talking about going to Barnes and Nobles and the sales associate had a great recommendation, we need to move away from. We're just doing sales. It's important to sell. It's a business. We get that. The best sales associates will be the connoisseurs. They will be the people who are creating that experience. You need folks who love, live and breathe your brand. You know, if you look at like a Lululemon, for example, they have so many different people of all different sorts, you know, shapes and sizes and backgrounds, who will say, you know what? I'm really into hot yoga. You know, try these pairs of pants. Or if you're into running, or if your parent, you know, you're doing hoop basketball, whatever the sport is that you're doing, they have people there that someone has done it or understands that sport that can actually point you to the proper things that you need. And you actually usually walk away with a lot more than what you intended to. Because again, if I'm walking into a store, I can buy it all night. I have the app. I get a discount for using the app. I'm there because I want to see if there's a sale and I want to see, I want to learn about the product and feel the product that I'm going to buy, which Amazon can never do. Not going. Not yet. That will truly be the death of retail space if Amazon figures that out. But what everyone else has a leg up on is building that experience and having, you know, curated connoisseurs as their sales associates.

Aaron Wolpoff [33:00 - 33:37]: Well, Gino, what, what happens to, you know, across the country? I think Canada might be immune from this, what's happening now? But across the country, we, we want retailers like this, specialty retailers to thrive and survive. Because when, you know, strip malls or malls lose their, their Cornerstone Store, I mean, there's a, there's a Fly, a Fry's Electronics not too far from me. Huge city block, you know, vacant for four years and finally they're going to knock it down to make apartments. But what's happening? What happens, Gina? What happens to communities when, you know, across the nation, when stores like this, maybe they'll get a buyer, maybe they won't, but they could sit vacant for, for a long time.

Chino Nnadi [33:37 - 36:38]: Yeah. And you know, it's happening in Canada too. Like, I grew up shout out to Scarborough Town Centre stc. I worked at the mall all through university in parts of high school. I was a mall kid. And so there's always a special place of going in and experiencing things. I feel like I'm a really good shopper, having done the whole customer experience piece there too. But it's sad because what happens is, okay, the Cornerstone store closes. A all the kids that would work there don't have jobs, they don't have those transferable skills. It's a lot harder to find things. Usually your first job is at a mall for most people if you, you know, have a mall nearby. Second. Okay, so that store is gone. Well, there's less foot traffic. The conversions for other stores don't work. And you can see it how like kind of the death of the malls, right? Slowly but surely those, that main driver, that one store that was driving people to come, now they're not kind of popping by these other stores. And so those other stores then lose business, they lose traction. And you know, slowly and surely I've watched in my own mall, certain stores just slowly shutting down like months after each other. And then you have whole mall blocks that are empty. Where people come to shine is in these specialty times. So the holidays, Halloween, you'll find those pop up stores, which is great. But we're looking year round as a business model to have a mall. You lose that and you know, food courts empty, people aren't there. And this is literally the death of them all. You saw this in the 80s. It's slowly happening again with the rise of online shopping and E commerce. And so it's, you know, a loss of job opportunities for, you know, the younger generation looking to get into the workforce. It's a loss of just a community space. Right. People would hang out in a mall, people would, you know, my mom used to do laps in the mall and you know, she had her little mall friends, all the old people. It's a hub. It can be a hub for some people, especially in lower income places where, you know, maybe you don't have access to, you know, like a national park or other things to go to where things are just really expensive. And so sometimes going to the mall and getting a treat and watching, you know, we used to have a little water fountain or something. And I remember my mom, there was this old man that would always sit there and she would always talk to him and have a coffee and like, you know, he passed a few years ago. But like that's a moment that I remember as a child that, you know, is dying off with the loss of these retail stores. And you know, as much as we say, okay, Party city is just one place, it's one major driver and it's a huge space. And so we really again need to bring back the experience into retailers.

Melissa Eaton [36:38 - 39:45]: I love what you're saying there, Chino, because I Think what it lends to is, Erin, this idea around curation of the mall, right? So the idea of understanding what are the kinds of things that drive people to malls or people to spaces, community spaces. And it's that feeling of community. It's that feeling of like I like to go to a certain place here in Denver, old town, Nevada, where they have a bunch of small businesses and it feels great. You know, there's the little plant store, there's the jewelry store, there's all of these kinds of things. And how do you get that feeling in a mall with some of these bigger names? And I think that you can do that. And you see some of the bigger, you know, stores segment their customers that way so that they have like a kid store and they give it a cute little name even though it's the Gap, right? You know what I mean? But they're, they're trying to make it feel like, oh, this is like a little mom and pop store. And then to have like the food experiences, like I was saying what commercial realtors were talking about, the food experiences, a fitness place like in our mall, there's now a yoga a bit, a huge yoga studio, which is kind of funny. And there's a bunch of medical med spas where you can get, you know, your nails done or Botox or whatever, and then also massages and things like that as well as pop ups, seasonality, you know, like the calendar store or whatever it is that just shows up in December so everybody can buy their new calendars. But I, I, I think that like the mall near us is kind of going through this resurgence. And what I've seen is that they've kind of, they've tried to intermix the big store, like the big Nike store. So that's, and then they have literally like this cowboy store, like with cowboy boots and like cowboy shirts. But it's very, feels very like rodeo local kind of thing for Colorado. And so it's really kind of a nice experience. And to your point, you see families taking the loop. I mean, I think you walk into a mall and you smell Cinnabon and you're immediately hooked, right? And then they've got the little play area for the kids with the little train and things like that. And again, I think there's ways, ways to draw people. But I do think really the space is going to be an issue. The last thing that people said, which is kind of goes back to the podcast that we just talked about that just dropped, was workspace. And I thought that was interesting. And they said it's a way in which to create community in a public, like we work type of space because you're close to food, you're close to stores, you might be close to a Target or whatever. It might all be part of that mall. And so it makes for an ease. There's parking already there and it's someplace where people know. So if there's a co working space, it could be something that could be really a positive experience for everybody. Depending upon what you're doing, perhaps.

Chino Nnadi [39:45 - 40:57]: I think that there's hope for, you know, maybe not Party City, as you mentioned, Aaron, and as a commodity, but the specialty stores, like, I think we don't care so much. Like, you know, Nike's lost a lot last year. A lot of big names, like all the luxury brands down. Is that part of the market? Is it because a lot of people being laid off and no one has as much disposable income? Yeah, there's a part of that. But I think people are moving away from just the stock standard. We want that experience. We deprived from that since COVID Right. We were stuck in a house. You had to order everything online. You want that uniqueness. And I think, you know, being able to go to parties or create a really cool event for your friends to go to, whether it's a gender reveal, a baby shower, a wedding, whatever. I do a wreath night, you know, during the thing and it's a fun get together and I just made it up. But like people are creating to connect. And if you can find a way to have a specialty store that's doing things different, that is not just what you can order on Amazon, that creates that experience. You will thrive in this environment and market.

Aaron Wolpoff [40:58 - 42:18]: Yeah. So specialty stores need to curate, create an experience, not just sell commodity, not just stack shelves. They need to create warmth and atmosphere, not just a warehouse space, and not be purely functional. And if we can infuse some local community and a sense of where you are geographically, that helps. Right. Gives it that reason for being. So my fix is, let's not let you know, Party City is going to do what it, what it's going to do. Spirit. Halloween stores, it's a meme. Right. They're a hermit crab. They're really great at finding these vacant locations. But why, you know, obviously it's a seasonal business, but why does it have to be? We came up with so many ancillary revenue streams and ways of utilizing the space. Why does it have to be so seasonal? My. My fix is spirit. Come on in. Buy These leases drop the Halloween and become the spirit store and own the spirit, the essence of wherever you are and infuse that into, you know, the. What you. What you merchandise, the types of events you have your marketing play and. And let's. Let's start going to spirit stores and. Or spirit experiences. Right. Fill those malls back up, up. Go for it.

Melissa Eaton [42:18 - 42:19]: Haunted houses.

Aaron Wolpoff [42:20 - 42:33]: Absolutely. Haunted houses. Would you go to, you know, Winter Wonderland? Sure. Would you go to a luau party on a Tuesday if it was inspiring enough. And would you pay to be there? Probably right.

Chino Nnadi [42:34 - 43:12]: Have a do it yourself class. Like all me and my girlfriends right now, we're all into making things and doing fun things. And it's like, you know, nobody has a support applies. Right. Taylor Swift eras tour happens. I'm not a swifty. So sorry. But you know, the little bracelets everyone's making really great opportunity. When she was in town to like, you know, host an event for kids to go in because I think we talked about, you know, yes, we can create and host a space, but guess what? If you're Spirit or Party City, they need to buy the things to fill the space. You have those things. So that's just double. Let's get it on the front end, let's get it on the back end, and let's make a business successful there.

Melissa Eaton [43:12 - 43:30]: And I think, well, that's a great example. Like, she was in every city. Party City should have been hosting friendship bracelet workshops where you could come in and charge people by the. By the number of bracelets they made and that you would have. Yeah, right.

Chino Nnadi [43:30 - 43:31]: Yeah. But make it.

Melissa Eaton [43:31 - 44:17]: I know that's kind of like blue forks. Erin, you're not going to get out of debt with, with friendship bracelets, probably, but it's. It's the idea of like, understanding what your customers are doing right now. And I think that's what your point is with Spirit is Spirit is actually embracing what is needed at this time. Party City did not, and that was led to their demise. And so the only way for some sort of Party City replacement would be to really kind of capitalize on partnerships, on experiences, and to really keep their eye on the competition and strategies for the far future, not just, you know, the P and L of today, because that's what I think Party City's downfall was.

Aaron Wolpoff [44:18 - 44:47]: Well said. I like that. Yeah. And, you know, I don't know if we mixed, if we fixed Party City, but I think we, you know, came up with some great ideas for. For what. What specialty retailers can do, how to reinvigorate some of those vacant or dormant malls. Right. And, and what it takes to, to bring people in and yeah, one bracelet event, maybe it's not going to turn it around. But you do that, you do that all day long for specialty audiences and you give them reasons for being there. We could reverse some fortunes out there. So.

Chino Nnadi [44:48 - 44:48]: Right.

Aaron Wolpoff [44:48 - 44:49]: I think we did some good today.

Melissa Eaton [44:49 - 44:50]: Yeah.

Chino Nnadi [44:50 - 44:51]: So too just.

Aaron Wolpoff [44:51 - 44:52]: Yeah.

Chino Nnadi [44:52 - 45:09]: Remember your audience because where am I gonna go? I'm never gonna plan an event when I'm ordering on outlets online for Amazon two or three days. I'm a last minute shopper. I kind of like the chaos and so party city spirit, please hear our cries and hopefully you heard this episode because I need you.

Aaron Wolpoff [45:09 - 45:27]: Thank you everyone for listening. Again, we are starting to get listener requests coming in and so I'm really excited about those and the topics we have ahead of us. At some point we may need to do just even a rapid fire around but, but keep listening. A lot more good stuff out there for you. This podcast is produced by Straight Media Group. All rights reserved.

Melissa Eaton [45:27 - 45:30]: If you'd like to learn more about how a podcast can help your company.

Aaron Wolpoff [45:30 - 45:43]: Establish authority and generate leads, please email us@erictraightforwardmg.com or go to straightforwardmg.com for more information.