Is the Party Ending for Party City?

Party City, known for low-cost party trinkets, Halloween costumes, and helium balloons, announced it would be closing 45 stores. Although top executives claim the closure isn’t due to the Helium shortage, the announcement came after Qatar closed two processing plants causing a global panic among those needing the gas. Helium is a non-toxic, odorless, tasteless, invisible naturally occurring gas that is found all over the universe; there’s also a lot of it. However, to make Helium usable for human consumption, it needs to be mined, purified, then processed into liquid form, which makes it a rare non-renewable resource that, by all estimates, will run out in 100 years. The US uses 55% of all Helium mined for MRI machines, rocket propulsion, semiconductor manufacturing, and other federal applications. As a result of the extensive use of this element, when there’s a shortage, retail stores like Party City get last dibs.

Party City Locations

Before the announced shortage, Party City was having a great year. According to the numbers found in CSG’s Leading Chain Tenants PLUS database, there was a 3.57% increase in revenue between 2017 and 2018 with 0.31% in store growth. In fact, since 2013 the company has seen a steady rise in profits and store openings per year. Currently (before the 45 stores close) the retailer has 960 freestanding locations in 45 states and Puerto Rico, with an average area of 10,000-12,000 square feet per store. The parent company, Party City Holdco Inc. owns five trade names including Factory Card & Party Outlet, Halloween City, Party City, Party Galaxy, and The Paper Factory. There have been no announcements yet regarding which stores in which states will be affected, but Party City believes the closings are necessary for profits and the future success of the company.