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Despite economy, companies’ sales are booming
By Don Shilling
Half the sales at Phantom’s retail stores come in the final week before July 4.
A lingering recession hasn’t snuffed out the sparkle for two local fireworks companies that are continuing grow.
Phantom Fireworks of Youngstown, the nation’s largest retailer of fireworks, has added four new stores and increased its sales headed into the biggest week of its year.
Zambelli Fireworks of New Castle, Pa., one of the nation’s largest fireworks-display companies, has increased its shows this year and has made internal moves to prepare for stronger growth in the future.
Both companies said this year’s growth has been slower than expected, but they welcomed any growth in these tough economic times.
George Zambelli, chairman of the New Castle company, said a few communities nationwide have canceled shows and some have scaled back on the size of shows, but the company has increased sales by about 3 percent this year.
Zambelli added, however, the company is poised to return to its normal growth of 10 percent to 15 percent or even higher. It has hired a new national sales director, Steve Frantz, who used to be president of the American Pyrotechnics Association, and acquired a fireworks company in Minnesota.
“We have great future plans which we don’t want to divulge to the pyrotechnic community,” he said.
Zambelli is in the midst of organizing 800 shows this week. It employs 50 year-round workers in New Castle and about 2,000 people nationwide this week.
Meanwhile, the Phantom Fireworks retail chain is waiting for the smaller buyers to start shopping.
“We’re expecting a big finish this week,” said Bruce Zoldan, owner of B.J. Alan Co. in Youngstown, the parent company of Phantom.
This is the most important week of the year for the fireworks retailer. Half of the sales at Phantom’s 55 retail stores typically come in the final week before July 4.
That is the time when smaller buyers — those with orders of $50 or $100 — do their shopping.
Zoldan is hoping job losses and pay cuts haven’t taken away too much disposable income from these customers.
He said his bankers warned him that they expected sales to drop 20 percent to 30 percent this season because of the recession.
So far, they’ve been wrong, but that may be because Zoldan decided to sweeten his deals.
To lure in the big spenders — those with backyard shows that cost $400 or more — Phantom added extra promotions in May. The number of bonus items given for each sale was increased by 30 percent.
Shoppers responded, and sales at the company’s retail stores increased by 23 percent in May.
June sales have been more slow but still healthy. Headed into this week, sales were up 4 percent for the month.
Some of the increase can be attributed to higher retail prices, but the numbers look good in the face of the recession, said William Weimer, company vice president.
“In this economy, if we can keep our heads above water compared to last year’s numbers, we would consider it a winning number,” he said.
This year’s numbers also have been helped by four new stores, which are located in Indiana, Pennsylvania and Wisconsin, and expanded stores in Canton and Florida.
Last year, sales were down about 7 percent headed into the final week, but a strong finish pushed the company’s totals ahead of 2007.
B.J. Alan also operates 1,200 temporary stands, mostly in the West, that are only open for the week before July 4. The stands account for about 30 percent of the company’s total sales.
The company does not release sales figures.
As the company deals with a recession that could lower demand, it also has been hit with higher operating costs in recent years.
Weimer said the company has been forced to raise its prices by 40 percent on many items over the past two years.
Assortment packages that used to be $99, for example, now run $139. Packages of bottle rockets that used to be $6.99 are now $9.99.
“Consumers have been pretty good about it,” Weimer said, adding that B.J. Alan had kept prices stable for the previous 10 years or more.
Prices have been raised to cover the increased cost of doing business with Chinese suppliers, he said.
Shipping costs from China have increased 75 percent over the past three years, and the rate of inflation soared in 2007 and 2008 in that country. That forced up the costs of labor and raw materials, Weimer said.
Also, currency rate changes have made imports more expensive, and Chinese suppliers have raised prices because they are receiving smaller subsidies from the Chinese government, he said.
B.J. Alan employs 400, including 200 in Youngstown, year-round, but its payroll swells to 2,300 this week. It also operates Diamond Sparkler in Youngstown, the only U.S. plant that manufactures sparklers.
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