World helium shortage puts Party City's future in the air

A global shortage of helium proves to be the ultimate accomplice.

Party City, the New Jersey-based party supply company, said Thursday it would close about 45 stores nationwide, citing a shortage of helium that would have helped it reach its peak. profit margin.

"This year, after carefully reviewing and evaluating our store portfolio, we made the decision to close more stores than usual to optimize our market performance, focus on the most profitable locations and improve our customer base." improve the overall health of our stores. our store portfolio, "said Party City General Manager James Harrison in a statement.

Party City closed on average 10 to 15 stores in recent years, but the future of helium being uncertain, this number has climbed to nearly 5% of all sites in the chain.

Children's birthday parties, threatened by the helium shortage, are not the only ones: non-renewable and lighter-than-air natural resources have many other crucial applications, from smartphones to MRI machines, space shuttles and particle accelerator Large Hadron Collider.

Although helium is the second most abundant element of the universe, most of it in the Earth 's atmosphere bleeds in space because it is lighter than the # 39; air. Helium used for industrial purposes is a byproduct of natural gas production. Qatar, which produces about 75% of global helium supply, was forced to suspend all gas exports in 2017 after Saudi Arabia imposed a blockade, which tied a knot in the supply chain.

The United States was once the world's largest producer of helium, but went into debt to store gas and began selling its reserves in the late 1990s at artificially low prices.

"The problem is that helium is exhausted faster than it can be produced these days," wrote Anders Bylund, an analyst at Motley Fool in a recent note.

Party City has been striving to explain the global helium shortage to customers on its website, noting: "Helium supply has always been a bit difficult (pun intended). With only three sources producing 75% of global helium, any disturbance has a significant impact. Currently, helium supply is very low as demand increases. "

A complete list of stores to be closed has not yet been released, but closures have been reported in Connecticut, Illinois, California, and Washington.

Party City said it was working to identify new sources of helium.

"We signed a letter of agreement for a new source of helium which, subject to the final execution of a definitive contract, would provide additional quantities of helium from this summer and continuing for two and a half years, "said Harrison.

"We believe that this new source should substantially eliminate the deficit we are experiencing at current allocation rates and improve our ability to restore a normal level of sales of latex balloons and metal balloons."