Helium is a finite natural resource and is an integral element used in rocket fuel tanks, MRI scanners as well as floating party balloons. The global shortage of helium has made it very challenging for Party City to sell balloons.
The party supply retail chain announced on Thursday that they will be shutting down 45 (approximately 5%) of their stores across the U.S and Canada in 2019. The closure of these stores will result in financial losses to the company in Q1; these will be attributed to “helium challenges”.
The CEO of Party City, James Harrison said in a statement that they typically shut down 10-15 stores each year. The company relies very heavily on their floating balloon products which are almost synonymous with traditional parties. Being unable to provide these present a major problem for the company.
The Only Way To Optimize Market Level Performance
The company has been unable to procure sufficient helium to fill its balloons which has compelled them to take the decision to shut down 45 stores. The New Jersey–based party-supply company’s balloon sales dipped amid a helium shortage, said Party City in a statement. The company, however, hasn’t made clear which of it’s around 870 stores in the United States and Canada they would shutter, but these closures will take place throughout 2019.
Harrison also stated that the only way to help optimize Party Time’s market level performance was to shut down the stores that weren’t doing too well. They would focus on ones that were more profitable. This was the only way to boost the overall health of the company’s store portfolio, he said.
A Solution Is In the Pipeline
Party Time is looking for new sources of helium and has now signed an agreement that might help ensure that its stores will have access to larger quantities of the gas at least for the next couple of years or more. CNN reported that in a conference call Harrison had with analysts on Thursday, he said that that this helium shortage has come during a big season for these balloons due to graduations,
The company has also posted this information on their web page where they address the helium shortage informing customers that their balloon orders may be impacted at certain stores. The site also mentions that the company is working on trying to replenish the helium at these stores as additional supplies come in.
World’s Helium Reserves are Dipping
Although helium is highly abundant in the universe (it’s the 2nd most abundant element), it’s a finite resource on our planet. According to Gasworld, 75% of the helium in the world is produced only by three sources located in Qatar, Wyoming,and Texas. The helium reserves that the US government has in Texas are quickly being depleted, compelling the Bureau of Land Management to ration the supplies.
However, there has been a rise in market demand. While helium is popularly used for filling balloons, it’s a highly versatile gas and a critical component for various research and medical applications, says Washington University.It’s also used in MRI machines and other medical and electronic devices as well as in aerospace manufacturing, and chemistry research.
The Department of Interior has added helium to its 2018 list of 35 different mineral commodities considered crucial for the national and economic security of the country.According to Phil Kornbluth, a consultant in the helium-industry, Earth is currently facing its third period of helium shortage (called Helium Shortage 3.0) since the year 2006,
Now, Party City has been suggesting various creative party hacks and alternatives to helium balloons like creating balloon walls or arches with foil or latex balloons.