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.

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.

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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.

Helium is also used in space flight to pressurize the fuel tanks of liquid-fueled rockets.