The new year brought in a new way of doing business at The Party Source in Bellevue.
BELLEVUE, Ky. -- The new year brought in a new way of doing business at The Party Source in Bellevue.
The company announced last week that it will now be 100 percent employee-owned.
The move will not mean any changes in the customer’s experience at the store.
The Party Source founder Ken Lewis said he wanted to make the move for years and was now in a position to do so.
The company’s new Employee Stock Ownership Plan took effect Jan. 1.
Company leaders said the program is an example of their commitment to their long-standing values and standards.
Lewis said he wanted to reward the employees for their contributions to the store’s success over the last 20 years.
“It’s been my dream all along to turn this company over to my employees who helped make The Party Source not just the largest beverage and alcohol store in the U.S., but one of the most successful and cutting edge operations as well,” Lews said in a release. “Selling to my employees is the ultimate way to keep this company moving forward even as I turn my attention to New Riff Distilling and Ei8ht Ball Brewing , both located on The Party Source campus. Much more than just personal material success, enriching so many hard working, loyal families gives me great personal satisfaction.”
The Party Source General Manager Jon Stiles, who was been with the company since its founding, said, “It has been an honor to represent the standard of excellence which is The Party Source, I have been lucky enough and honored to work hand in hand with Ken Lewis and the other long-term employees to share in the success and vision of the company.”
Stiles said the first year stock will be allocated as units based on years of previous service and salary level. He said it’s an effort to recognize all of the long-term employees that have helped grow the company to this point.
After the first year, the stock will be allocated in units based on salary level alone.
Stiles said there is no stock at this point, and that the ESOP will have a trustee and that person has financial advisors that yearly set the value of the stock.
“At the beginning of this year, the stock resides with the Ken Lewis who is selling the company to the employees. After we make payments for a year, a certain amount of stock is then transferred to the ESOP,” Stiles said.
The Party Source will also be maintaining its 401k program, but it suspended company matching as of Jan. 1.
“The Board of Directors will evaluate our cash flow in the future to see if we want to restore any portion of the match. But the value of the stock being transferred drastically exceeds the current 401k matching funds paid by the company. And keep in mind, employees build stock value on the basis of their earnings and their time on the job. Their stock value grows without any monetary contributions on their part,” Stiles said.
As for the operation of the company in the long term, the member employees elected a board of directors. However, Stiles said he will still make the day to day decisions along with the company’s current managers.
He said the board will address larger issues that pertain to the ESOP and decisions that involve judgments “intended to grow shareholder value, set corporate strategic goals and business strategy, appoint officers and ESOP trustee as necessary, advise CEO and management, evaluate and approve significant corporate transactions, review financial statements, establish corporate standards of rules of conduct, determine contributions to the ESOP and 401k, and down the road, declare dividends and bonuses.”
Stiles said the purchase only applies to The Party Source retail store. The Ei8ht Ball Bar, Ei8ht Ball Brewery and New Riff Distilling will all be a separate entity owned by Lewis.
“(However,) that doesn't mean that down the road the ESOP won't consider future expansion or acquisitions if the situation allows or requires it,” Stiles said.
The Party Source currently has 51 full time employees and 18 part time employees who will share in the ESOP.