Visalia, Fresno store franchise owner says his stores will not be among 45 store closings announced by the corporation following a helium supply shortage
By Reggie Ellis @Reggie_SGN
VISALIA – A helium shortage may have left the fate of some Party City locations up in the air, but most of the Valley’s stores have their feet on solid financial ground.
On May 9, Party City announced it would be closing 45 stores as part of its first quarter financial results. The company said finances were relatively stagnant with the exception of latex and Mylar balloon sales, which were “negatively impacted” when its helium supplier could not keep up with the demand. Party City operates 870 stores nationwide.
Party City CEO James M. Harrison said the company has signed a letter of agreement for a new helium supplier that would provide the party supply store with helium for the next 2.5 years. Harrison said the announcement of closures should come as no shock to Party City consumers as the company typically closes 10-15 per year in an attempt to prevent operating unprofitable stores.
“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,” Harrison told investors in the May 9 release.
It’s unlikely that any of those closures will happen in the Valley, which has managed to largely avoid the retail apocalypse happening across the country. At least half of the Party City locations in the Valley are also franchises with local ownership. Rob Fox is the CEO of Party Werks and Professor Toy, Inc. which owns three Party City locations in Visalia and Fresno. Fox has owned Party Werks in Visalia since 1989 and converted his business to a Party City franchise in 2007. He also owns two Party City franchises in Fresno at the Riverpark shopping center and another at the corner of Shaw and Clovis avenues. Hanford’s Party City is a corporate store but it’s unclear if it will be closing. The store manager deferred questions to the corporate office, which did return calls as of press time.
“Most Party City locations used to be franchises but they have opened more corporate stores in recent years,” Fox said. “Those store closures will all be corporate stores.”
Fox said his stores were largely unaffected by the helium shortage because balloon sales represent a small percent of store sales.
Helium is one of the most versatile and important elements on the planet. It’s used to cool everything from the magnets in MRI scanners to the rocket fuel and create protective atmosphere for making fibre optics and semiconductors, and in arc welding. In addition to filling the balloons at your child’s birthday party, it is also used to fill weather balloons and blimps. It is also used to detect leaks in sealed ventilation systems, such as your car’s air conditioning, and for rapid inflation and diffusion, such as your car’s airbag system. The U.S. government owns about 30% of the world’s supply. It is projected that the current helium reserves will last another 200 years.
“When it comes to helium, party balloons are kind of low on the totem pole of importance compared to scientific research,” Fox said.