In 2019 and 2020 the Company performed a comprehensive review of its store locations aimed at improving the overall productivity of such locations (“store optimization program”). After careful consideration and evaluation of the store locations, the Company made the decision to accelerate the optimization of its store portfolio with the closure of stores, which were primarily located in close proximity to other Party City stores. In 2019, 55 stores were identified for closure, out of which 35 stores were closed in 2019 and 20 stores were closed in January 2020. In 2020, 21 stores identified for closure in the first quarter of 2020 were closed in the third quarter of 2020. These closings provided the Company with capital flexibility to expand into underserved markets. In addition, the Company evaluated the recoverability of long lived assets at the open stores and recorded an impairment charge associated with the operating lease asset and property, plant and equipment for open stores where sales were affected due to the outbreak of, and local, state and federal governmental responses to, COVID-19. During the three and six months ended June 30, 2020, the Company recorded the following charges:


	Three Months Ended June 30,		Six Months Ended June 30,
	2020		2020
Inventory reserves	$	—	$	11,696
Operating lease asset impairment		181		14,393
Property, plant and equipment impairment		—		2,065
Labor and other costs incurred closing stores		983		2,434
Total	$	1,164	$	30,588

The fair values of the operating lease assets and property, plant and equipment were determined based on estimated future discounted cash flows for such assets using market participant assumptions, including data on the ability to sub-lease the stores.

The charge for inventory reserves represented inventory that was disposed of below cost. The charge for inventory reserves was recorded in cost of sales in the Company’s statement of operations and comprehensive loss. The other charges were recorded in store impairment and restructuring charges in the Company’s statement of operations and comprehensive loss.

In conjunction with the store optimization program and store impairment, there were no charges for the three and six months ended June 30, 2021.