May 11 (UPI) -- Party City announced that it will be closing 45 stores this year in the midst of a worldwide helium storage, but did not directly blame its shrinking business to the challenge.
The outlet, which makes money off of helium to blow up party balloons, said Thursday closures represent about 5 percent of its 870 locations.
"Each year, Party City typically closes 10-15 stores as a part of our prudent network optimization process and in response to ongoing consumer, market and economic changes that naturally arise in the business," James M. Harrison, Party City's chief executive, said in a statement.
"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," he added.
Harrison admitted, though, that the helium crisis did impact the company over the first quarter in latex and metallic balloon sales.
"Despite these helium challenges in the first quarter, we made progress on many fronts operationally and our global team continued to execute against our key strategic priorities including: developing plans to test new store concepts, implementing pricing initiatives designed to improve value perception, and increasing product competency in the area of paper straws as part of our focus on environmental sustainability," he said.
Harrison said Party City recently signed a letter of agreement for a new source of helium and could start providing helium to its stories this summer for the next five years.
"We remain encouraged by the 2019 tailwinds that will present themselves later this year, including a strong IP calendar, a Thursday Halloween and anticipated benefits from supply chain investments that we made following disruptions that impacted the business in 2018," he said.
Helium could have more far-reaching consequences beyond Party City. Deep sea diving, airbags, cryogenics, rocket fuel, MRI machines along with fiber optics and semiconductors all depend on helium, USA Today reported.
The world's supply of helium, which is extracted from natural gas mining, could be depleted in about 200 years unless a way is found to recycle it.
"Some of us are urging recycling of helium," Washington University chemistry professor Sophia Hayes said. "That's hard to do and it requires a lot of engineering and is expensive."