Party City announced it will close 45 of its 870 existing stores this year amid a global helium shortage.
“This year, after careful consideration and evaluation of our store fleet, we’ve made the decision to close more stores than usual in order to help optimize our market level performance, focus on the most profitable locations and improve the overall health of our store portfolio,” Party City CEO James M. Harrison said in a press release on Thursday, May 9.
While the company didn’t announce which stores it plans to close, it did mention the closures will allow the company to prioritize its most profitable locations for the future. The number of closures is also triple the number of stores Party City usually closes per year, which is between 10 and 15 stores, Harrison said.
With the recent helium shortage, a slew of industries—from party suppliers to medical and aerospace technologies—were all affected.
Just three sources in the world produce about 75 percent of the world’s helium: Qatar, Texas, and Wyoming, according to gas industry publication Gasworld. However, these sources are at risk of depletion, and the market is highly affected by any supply fluctuations.
Helium is typically found in small amounts within natural gas extracted from the ground.
Helium supply swings again … discover the last article of @gasworld about Helium ! => “Consensus among experts is that helium will remain tight going forward”
As usual … Europe is one of the most “at risk” region ! Fortunately @458Energy is working hard to fix the issue !
— 45-8 Energy (@458Energy) January 7, 2019
Last year, crude helium prices increased a whopping 135 percent for its 2019 auction, according to Gasworld.
Party City even made an announcement on their website alerting their customers to the helium shortage.
“Because of this global helium shortage, fulfillment of balloon orders may be affected at your store. We’re working to replenish the helium at the affected stores as more supply becomes available. Despite this helium hiccup, Party City is committed to helping you to throw an unforgettable party,” the company wrote on its website.
However, since then, the company seems to have found a solution to its helium shortage. The company reported it secured a new source of helium.
“We believe this new source should substantially eliminate the shortfall we are experiencing at current allocation rates and improve our ability to return to a normal level of latex and metallic balloon sales,” Harrison said in the Thursday press release.
Party City finds new helium source to revive the deflated balloon business – MarketWatch: * Party City finds new helium source to revive the deflated balloon business MarketWatch * Party City to close 45 stores; Q1 sales miss Chain Store Age * Big… https://t.co/iOG089aikt
— Ames Iowa (@iowa_ames) May 10, 2019
So far, U.S. retailers have announced 6,130 store closures this year, according to Coresight Research, which keeps a weekly record of store closures and openings in the U.S. and U.K. That number was released on May 3, before Party City made its announcement.
Just last month, the number of store closures in the U.S. already exceeded the total number of closures in all of 2018, according to Coresight. In 2018, there were 5,864 store closures.