NEW YORK, August 24, 2000 (PRIMEZONE) -- iParty Corp. (AMEX:IPT), owners and operators of iParty.com, a premier destination for party goods and party planning, today announced that through its newly formed and wholly-owned subsidiary, iParty Retail Stores Corp., it has acquired 33 retail stores from The Big Party Corporation for approximately $4 million.
Under terms of the agreement, iParty Retail Stores Corp. will acquire the inventory, fixed assets and the leases of 33 retail stores located in Massachusetts, Connecticut, New Hampshire, Rhode Island, Florida and Maine. These 33 retail stores, averaging 10,000 square feet, realized revenue of approximately $50 million in 1999. The Big Party, which filed for bankruptcy protection earlier this year, operated over 50 retail stores located throughout the eastern United States.
To help finance the acquisition, iParty Corp. has issued $2 million of Convertible Preferred Stock to certain existing shareholders. The remaining $2 million has been funded internally through iParty Corp.'s existing cash balance. In addition, iParty Retail Stores has arranged a $7.5 million line of credit from Paragon Capital, which will be utilized for ongoing working capital needs, including refurbishing the stores' inventory and capital expenditures.
Sal Perisano, Chief Executive Officer of iParty Corp., commented, "We are very pleased to acquire these 33 stores from The Big Party, as it not only provides us with another distribution channel for our products, but it also will help increase brand awareness of the iParty.com name. We intend to change the name of the stores to promote a single "iParty" brand, in order to increase overall awareness of both our on-line operations as well as our catalogues. These retail stores will not only provide the Company with greater marketing synergies, but they should also provide iParty with a broader revenue base, greater operating leverage and increased buying power as we become a more dominant force within the party supply industry."
Mr. Perisano concluded, "The acquisition makes iParty a true "click-and-mortar" retailer, offering customers both on- and off-line party planning solutions and services, through our website, stores and catalogues. We anticipate that the acquisition will provide iParty with an opportunity to improve the Company's ability to leverage its existing and future strategic alliances."
About iParty Corp.
Headquartered in New York City, iParty.com, owned and operated by iParty Corp. (AMEX:IPT), is a premier online destination and offline national catalog for party givers that makes throwing a successful event both stress-free and fun. From over 11,000 party supplies and costumes to an online party magazine and party related content, iParty.com offers consumers a sophisticated yet fun and easy-to-navigate resource with a definitive assortment of products to customize any party, including birthday bashes, Easter get-togethers, graduation parties, summer barbecues, and, of course, Halloween. iParty.com offers reliable, time-tested knowledge of party-perfect trends, superior customer service and distribution to ensure comprehensive merchandise selections for every occasion. Please visit our site at www.iparty.com.
Certain information included in this news release (as well as information included in oral statements or other written statements made or to be made by iParty Corp.) contains statements that are forward-looking, such as statements relating to anticipated future revenues of the company and the success of current product offerings. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of iParty Corp.
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