Amid a global helium shortage, Party City announced Thursday it will shutter 45 stores in 2019. The New Jersey-based party supplies company did not release a list of affected stores but said the closures will take place throughout the year. There are 870 Party City stores in the U.S. and Canada and the closures represent about 5% of locations. Local news outlets have so far reported closings in California, Illinois, Connecticut and Washington. Party City CEO James Harrison said in a statement Thursday the company typically closes 10 to 15 stores each year. “It’s important to note that Party City’s decision to close an increased number of stores in 2019 is completely unrelated to the global helium issue," Harrison said in an emailed statement Friday, noting that the company had "made significant in-roads in addressing" the shortage. "The decision to close 45 stores in 2019 is part of our network optimization process focusing on maximizing store performance on a market basis," Harrison said. The company said it believes the closures will improve its overall profitability. Store closings 2019:CVS, Payless and Victoria's Secret are just some of the brands closing stores Helium shortage 2019:Why it's harder to throw a party and fill balloons The year has been a tough one for retailers with more store closings already announced than all of 2018. Based on figures from global marketing research firm Coresight Research, bankruptcy filings and company earnings reports, more than 6,500 have announced they will close locations. Group egg freezing: 'Egg-cations', 'Freeze with Friends'? Women band together to lower costs of treatments In 2018, Coresight tracked 5,528 closings, which included all Toys R Us locations, plus hundreds of Mattress Firm stores, Kmart and Sears locations, and Brookstone's remaining mall stores. Party City said it is working to secure a new helium source and a contract, which is subject to final approval, would provide its stores with helium beginning this summer and continuing for several years. "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. Contributing: Melanie Anzidei, North Jersey Record Follow Kelly Tyko on Twitter: @KellyTyko<doc-sep>Bank of America CEO on raising minimum wage: It's an investment in our teammates President Joe Biden stops to talk to the media as he drives a Ford F-150 Lightning truck at Ford Dearborn Development Center, Tuesday, May 18, 2021, in Dearborn, Mich. Ethereum's 27-year-old founder says we're in a crypto bubble. Did it just burst? Vitalik Buterin, co-founder and inventor of Ethereum speaks during Samsung Developer Conference in San Jose, California on October 30, 2019. QAnon is spreading in churches. These pastors are trying to stop it Left: James Kendall is the Senior Pastor at Grace Community Church in Madera, California. Kendall gave a sermon at his church warning congregants about QAnon. Right: Ben Marsh is a pastor at First Alliance Church in Winston-Salem, North Carolina. He has seen members of his church share conspiracy theories on their social media pages. Carlos Ghosn says he has to tell his side of the story TOPSHOT - Former Renault-Nissan boss Carlos Ghosn looks on before addressing a large crowd of journalists on his reasons for dodging trial in Japan, where he is accused of financial misconduct, at the Lebanese Press Syndicate in Beirut on January 8, 2020. - Ghosn arrived at the venue, making his first public appearance since skipping bail in Japan. The fugitive tycoon, who denies any wrongdoing, skipped bail while awaiting trial on multiple charges of financial misconduct including allegedly under-reporting his compensation to the tune of $85 million. (Photo by JOSEPH EID/AFP via Getty Images) B25_25594_R James Bond (Daniel Craig) prepares to shoot in NO TIME TO DIE, an EON Productions and Metro-Goldwyn-Mayer Studios film Credit: Nicola Dove © 2020 DANJAQ, LLC AND MGM. ALL RIGHTS RESERVED. (CNN Business) — Helium is the second-most abundant element in the galaxy, yet Party City is struggling to find enough of the gas to fill balloons. Balloons are big business for Party City (PRTY). The company’s mylar balloon sales fell 8% last quarter, dragging overall sales down 1.4% at Party City (PRTY) stores open at least a year. Sales would have risen if not for the balloon problems, the company said Thursday. Filling balloons with helium is among the company’s most profitable services, according to Barclays’ Matt McClintock. Helium brings people into the store, and those customers usually buy other items instead of buying on Amazon (AMZN) or at another store. But with the earth’s (and Party City’s) helium supplies dwindling, potential balloon customers have been searching elsewhere for party goods. Party City also said it will close 45 stores this year. That’s triple the number of stores the company typically closes in any given year. In a worrisome sign, almost all of those stores are profitable, the company said. The company is closing the stores to boost overall profitability, hoping customers will shop at nearby Party City stores. It has about 900 across North America. Whither the world’s helium? Michael Nagle/Bloomberg via Getty Images Party City ran out of helium to fill its balloons. Helium supplies been running out for several years. Helium is formed by the atom-smashing power of the sun and other stars. But on Earth, helium is a finite resource. The Earth holds pockets of helium buried under rock, but it’s notoriously hard to capture because it, well, floats. When drilling or fracking for natural gas, energy companies capture some helium and sell it. But helium makes up a tiny percentage of the gasses trapped under rock formations. Over the past few years, some drillers have claimed to find troves of helium buried underground, but those haven’t always panned out. Party City said it really started feeling the pinch in August 2018. Good and bad news for Party City The good news for Party City is it signed an agreement with a new helium supplier. Party City believes the new supplier can help it return its balloon business back to normal starting in the summer, and it hopes the supplies will last for the next two-and-a-half years. “We believe this new source should substantially eliminate the shortfall we are experiencing,” said Party City CEO James Harrison in a statement. The bad news is Party City said its helium shortage will continue through the spring. That’s bad timing: May is a big month for balloons. “Obviously graduation is a big season for balloons, no doubt about that,” said Harrison on a conference call with Wall Street analysts Thursday. And once Party City gets its helium back, its new supplier will charge more than its last provider. So it will have to raise balloon-filling prices. Helium still remains cheap, and Party City doesn’t expect the higher prices to hurt sales in the long-run. It may also be able to eat some of that cost over time, Harrison predicted. But he said higher helium prices may be here to stay. “Over time, will helium come back down in price? Nobody knows. We’ll see,” Harrison said. Harrison cautioned, however, that the additional helium wasn’t a sure thing. Party City’s new supplier might believe it is sitting on a lot of helium, but it can’t know for sure until it bottles and sells it. “Mother Nature will ultimately determine whether or not those fields have the adequate amount helium to reach the goals that we’ve set,” Harrison said. “We feel very comfortable that the expectations and the estimates made are solid.” Still, the stock price soared 10% Thursday, because investors were pleased that Party City was able to secure another helium supplier. The stock fell 3% Friday, dragged down by the broader market.<doc-sep>A global helium shortage is proving to be the ultimate party pooper. Party City, the New Jersey-based party supply company, announced Thursday it will shutter around 45 stores in locations throughout the nation, citing a short supply of helium hitting its profit margin. “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 Chief Executive Officer James Harrison said in a release. Party City had been closing 10 to 15 stores, on average, in recent years, but with the future of helium uncertain, those numbers have climbed to nearly 5 percent of all of the chain’s locations. It's not just kids' birthday parties at risk from the helium shortage — the lighter-than-air, nonrenewable natural resource has many more crucial applications, from smartphones to MRIs to space shuttles and the Large Hadron Collider particle accelerator. Although helium is the second-most abundant element in the universe, most of it in the Earth's atmosphere bleeds off into space, since it is lighter than air. Helium used for industrial purposes is a byproduct of natural gas production. Qatar, which produces around 75 percent of the world's helium supply, was forced to halt all exports of the gas in 2017 after Saudi Arabia imposed a blockade, tying a knot in the supply chain. The U.S. itself used to be the world's largest helium producer, but ran into debt storing the gas and began selling off its reserves in the late 1990s at artificially low prices. "The problem is, helium is being used up faster than it can be produced these days," wrote Anders Bylund, an analyst at Motley Fool in a recent note. Party City worked to explain the global helium shortage to customers on its website, noting, “Helium supply has always been a little up in the air (pun intended). With only three sources producing 75 percent of the world's helium, any disruption causes a significant impact. Currently, helium supply is very low while demand is growing.” A full list of the stores to be shuttered has not yet been released, but closings have been reported in Connecticut, Illinois, California, and Washington. Party City has indicated it is working to identify new sources of helium. “We have signed a letter of agreement for a new source of helium which, subject to final execution of a definitive contract, would provide for additional quantities of helium beginning this summer and continuing for the next 2.5 years,” Harrison said. “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.”<doc-sep>
The retail chain previously said the lack of access to the natural gas has "negatively impacted our latex and metallic balloon categories" Party City CEO Says Closure of 45 Stores Is 'Completely Unrelated' to Helium Shortage Party City has announced its plan to close roughly 45 stores. The New Jersey-based retail chain announced the shocking decision on Thursday. “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 Chief Executive Officer James Harrison said in the statement posted to the company’s website. Harrison also explained that the retail store has signed an agreement with a new supplier “for a new source of helium, which would provide for additional quantities of helium beginning this summer.” Nonetheless, the helium shortage couldn’t have come at a more inconvenient time for the party store. “Obviously graduation is a big season for balloons, no doubt about that,” Harrison said on a conference call with Wall Street analysts on Thursday, CNN reported. The company did not name which locations would be closing. However, in a separate statement, Harrison said store closures are “completely unrelated” to the shortage of helium. “It’s important to note that Party City’s decision to close an increased number of stores in 2019 is completely unrelated to the global helium issue. These are two separate topics, the latter of which we’ve made significant in-roads in addressing,” Harrison said. “The decision to close 45 stores in 2019, is part of our network optimization process focusing on maximizing store performance on a market basis. We believe that the opportunity to recapture much of the business conducted in the closed stores in other Party City locations within the market, will provide for overall improved profitability for our Company. It is also important to note that most of the stores being closed were themselves profitable on a stand-alone basis.” Meanwhile, helium shortage has been an ongoing issue for the last several years. Party City, balloons Party City balloons | Credit: Getty The gas is a chemical element with the symbol He and atomic number 2. It is a colorless, odorless, tasteless, non-toxic, inert and monatomic gas. Interestingly, helium is very common — it’s the second most abundant element in the universe, according to The Royal Society of Chemistry. However, that does not mean it is abundant on earth. Helium “only accounts for 0.00052% of the Earth’s atmosphere and the majority of the helium harvested comes from beneath the ground being extracted from minerals or tapped gas deposits. This makes it one of the rarest elements of any form on the planet,” according to Universe Today. The gas is also only available in Ras Laffan Industrial City in Qatar, ExxonMobil in Wyoming and the National Helium Reserve in Texas, which is the main reason for the shortage, according to Gasworld.com. RELATED: Morgan Freeman Sucks Helium Balloons with Jimmy Fallon At this time, the reserves are being depleted. “It’s a serious problem,” organic chemistry professor at Oakland University Roman Dembinski told USA Today. “A shortage and disruption would quench our magnets, so we would be without instruments,” Dembinski said. The lack of helium is not only bad news for the balloon business, but also for technology, including life-saving MRIs that scan for damage to organs and tissues, USA Today reported.