Party City Will Close 45 Stores Due to Helium Shortage

June 25, 2019

For decades, the New Jersey-based party supply retailer Party City has relied on balloon sales to keep it afloat. Doing so requires a plentiful supply of helium, the second-most abundant element in the universe that is nevertheless increasingly difficult to find on Earth. Due to both supply chain and production problems, companies are currently using up helium at a quicker rate than it can be produced. As a result, the skyrocketing price of helium has begun to spoil the fun for Party City.

In May the retailer announced it would close as many as 45 stores this year because of the global helium shortage. “Helium supply has always been a little up in the air (pun intended),” reads a note on the Party City website. “With only three sources producing 75 percent of the world’s helium, any disruption causes a significant impact. Currently, helium supply is very low while demand is growing.” Much of the world’s helium supply is located in Qatar, a Middle Eastern nation that has recently been subjected to international boycotts. Meanwhile, the American helium industry deflated in the 1990s and has been selling off its reserves ever since. 

Of course, this lack of helium isn’t just bad news for Party City. From smartphones to space shuttles, helium has all sorts of applications across a wide variety of industries. That’s why companies like Party City are desperate to find a new source that could sustain it at least for the short term. “We have signed a letter of agreement for a new source of helium which… would provide for additional quantities of helium beginning this summer and continuing for the next 2.5 years,” said Party City CEO James Harrison. “We believe this new source should substantially eliminate the shortfall we are experiencing at current allocation rates and improve our ability to return to a normal level of latex and metallic balloon sales.”

Questions:

  1. How has the global helium shortage affected operations at Party City?
  2. With the global helium supply dwindling, should governments start to regulate its use? For example, should smartphone makers be given preference above balloon sellers like Party City? 

Source: Mary Pflum, “Global Helium Shortage Puts Future of Party City Up in the Air,” NBC News, May 10, 2019.

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