ELMSFORD, NY — Party City won’t be celebrating this news.
The Westchester-based party goods chain said it will close 45 of its locations this year. There are currently 870 Party City stores across the country. The store closures will take place throughout the year.
Party City also reported first quarter results and blamed a global shortage of helium that is affecting sales of its popular balloons for parties. Helium is the air that gives balloons its lift.
The company reported sales increased 1% in the first quarter to $513.1 million. Net income was $1.1 million.
James M. Harrison, Chief Executive Officer of Party City, said, “Overall, our first quarter results were largely in line with our expectations on the top and bottom lines, inclusive of the helium shortage, which negatively impacted our latex and metallic balloon categories. 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.”
Mr. Harrison continued, “Most importantly, we have signed a letter of agreement for a new source of helium which, subject to final execution of a definitive contract, would provide for additional quantities of helium beginning this summer and continuing for the next 2.5 years. 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. 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.”
Mr. Harrison added, “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. 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.”
