Party City Shutters 45 Stores, Combats Helium Shortage
Retailer Party City announced that it will close nearly 45 of its 870 stores across the U.S. in a recent conference call with investors.
The company plans to consolidate stores that are near other Part City locations. Company executives report that the closures are aimed to reshuffle its retail strategy following corporate mergers with retailers such as Factory Card, Party Stores and iParty. Party City says that the individual stores being shuttered are meeting estimated sales targets but have added to crowded retail areas due to recent mergers.
“While individually all these stores look good on a piece of paper for the most part, when you really pull back and look at the total market, there’s an oversaturation in some areas of party retail stores that we now are the owner of,” says Ryan Vero, president, retail group, Party City, during a conference call with investors transcribed by Seeking Alpha.
The store closures are also attributed to price increases in the helium market. Party City is working to manage its helium supply in the face of a global shortage of the natural gas. The party supply company reported it has identified a new supply of helium that will give it a two-and-a-half-year runway. News of a new supply come at the right time, as an increase in helium costs dragged overall sales down 1.4 percent at Party City stores last year.