Party City is closing 55 stores and says it has nothing to do with the helium shortage that is affecting sales. We visited a store to try and find the real reason.

Party City balloonsShoshy Ciment/Business Insider

  • Party City is closing another 10 stores in 2019 in addition to the 45 stores it said it would close this year.
  • A global helium shortage has impacted the company's balloon sales, CEO Jim Harrison said in an earnings call with investors, but the CEO affirmed in a statement that the company's decision to close 10 more stores is "completely unrelated to the global helium shortage."
  • We visited Party City to see if we could find why it added 10 more stores to the list of 2019 closures.
  • Visit Business Insider's homepage for more stories.

Party City is closing 10 more stores, the company announced in a recent financial statement.

The news comes after the company said in May that it would close 45 stores in 2019 and amid a global helium shortage that has impacted the retailer's balloon sales. In May, the company said it secured a new source of helium to weather the shortage, but the company reported a negative impact in balloon sales this quarter.

"Overall, in the second quarter we continued to experience headwinds from direct and indirect impacts of the helium shortages and higher helium costs in many of our markets," CEO Jim Harrison said in the report.

However, the company's decision to close the additional 10 stores for a total of 55 is "completely unrelated to the global helium shortage," Harrison said in a statement. "These are two separate topics. Our decision to close an additional ten stores in Q4, which were originally slated for closure in 2020, is part of our network optimization process, focusing on maximizing store performance on a market basis."

Party City started the year with 870 stores and typically closes 10 to 15 locations a year, Harrison said in May.

Read more: Party City is closing 45 stores and finding a fix for a global helium shortage - here's the list of closing stores

Harrison also noted that Party City is working with a provider to gain additional supplies of helium. The company also has plans to work with another provider beginning mid-October.

Party City reported second-quarter revenue growth of 0.5%, growing to $563.9 million, but reported a store sales decrease of 2.1% compared to the previous year. Harrison called out balloons specifically as responsible for some of the decline in sales in stores compared to last year, as well as the kid's birthday category.

On its website, Party City has a fact-sheet that explains the global helium shortage and offers alternatives for helium-filled balloons.

We visited a store to try to see why it added another 10 stores to its 2019 closings. Party City has not released a full list of the stores it is planning to close, but has said it is focusing on closing less profitable stores.

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We stopped by a Party City in downtown New York City.

We stopped by a Party City in downtown New York City.

The store seemed pretty large from the outside and claimed to be the "discount party super store." Still, we entered with our expectations at bay.

The store seemed pretty large from the outside and claimed to be the "discount party super store." Still, we entered with our expectations at bay.

A sign in the window was advertising a sale on summer merchandise, so we entered the store expecting to find some deals.

A sign in the window was advertising a sale on summer merchandise, so we entered the store expecting to find some deals.

The first thing we saw upon walking in was this massive gumball machine. This Party City had a huge candy section at the front of the store and it was beyond elaborate.

The first thing we saw upon walking in was this massive gumball machine. This Party City had a huge candy section at the front of the store and it was beyond elaborate.

There was practically a miniature candy shop in the middle of the store. 10 pieces of candy were just $1 or shoppers could choose from the vast array of packaged bags.

There was practically a miniature candy shop in the middle of the store. 10 pieces of candy were just $1 or shoppers could choose from the vast array of packaged bags.

We also quickly found the summer items the store had advertised outside.

We also quickly found the summer items the store had advertised outside.

A lot of the summer party items were displayed in cardboard boxes. This wasn't the most appealing look and it gave the store a big-box feel.

A lot of the summer party items were displayed in cardboard boxes. This wasn't the most appealing look and it gave the store a big-box feel.

The summer sale section also had a bunch of supplies for larger parties, such as these buffet sets.

The summer sale section also had a bunch of supplies for larger parties, such as these
buffet sets.

After browsing through the front of the store, we decided to venture into the aisles. But before we could get too far, we were confronted by a spooky-looking table advertising available jobs at Party City.

After browsing through the front of the store, we decided to venture into the aisles. But before we could get too far, we were confronted by a spooky-looking table advertising available jobs at Party City.

There were some helium balloons at this table that let shoppers know that the store was hiring. Considering the harsh effect that the helium shortage has had on the retailer, this decoration seemed unnecessary.

There were some helium balloons at this table that let shoppers know that the store was hiring. Considering the harsh effect that the helium shortage has had on the retailer, this decoration seemed unnecessary.

A lot of the aisles were somewhat empty, as the store was getting ready to display its Halloween merchandise in the middle of August.

A lot of the aisles were somewhat empty, as the store was getting ready to display its Halloween merchandise in the middle of August.

We were surprised to find that some Halloween decor was already on display.

 We were surprised to find that some Halloween decor was already on display.

And we found a whole section of fall-infused decorations and party goods. With Starbucks reportedly launching its Pumpkin Spice Latte at the end of August — it seems that it's never too early for stores to start capitalizing on fall.

And we found a whole section of fall-infused decorations and party goods. With Starbucks reportedly launching its Pumpkin Spice Latte at the end of August — it seems that it's never too early for stores to start capitalizing on fall.

Source: Business Insider

The aisles were long and packed with party cups, cutlery, plates, tablecloths, and centerpieces. In some cases, the aisles were overwhelming. Walking down this color-coded section felt like walking through a rainbow.

The aisles were long and packed with party cups, cutlery, plates, tablecloths, and centerpieces. In some cases, the aisles were overwhelming. Walking down this color-coded section felt like walking through a rainbow.

Overall, the tall aisles had a daunting feeling to them.

Overall, the tall aisles had a daunting feeling to them.

We found an extensive diagram of the store's costume offerings. Though we noticed a variety of costumes on sale throughout the store, our favorites were from the hit Netflix series "Stranger Things."

We found an extensive diagram of the store's costume offerings. Though we noticed a variety of costumes on sale throughout the store, our favorites were from the hit Netflix series "Stranger Things."

Towards the back of the store, we noticed what appeared to be a makeshift holding room for merchandise that had recently arrived.

Towards the back of the store, we noticed what appeared to be a makeshift holding room for merchandise that had recently arrived.

There were so many boxes back here, making it difficult to maneuver and access certain items on sale.

There were so many boxes back here, making it difficult to maneuver and access certain items on sale.

With Halloween preparations underway, this was understandable. However, it made for a messy and unsettling experience.

 With Halloween preparations underway, this was understandable. However, it made for a messy and unsettling experience.

Despite the mess, Party City seemed to have options for every possible party theme, from sports ...

Despite the mess, Party City seemed to have options for every possible party theme, from sports ...

... to bridal showers.

... to bridal showers.

There was even a whole table set up with different bridal shower decorations, which seemed like a good move to capitalize on wedding season.

There was even a whole table set up with different bridal shower decorations, which seemed like a good move to capitalize on wedding season.

The prices were generally low, but the store seemed too big overall. While the huge variety was nice, it seemed slightly over-the-top and unnecessary for a party supply store.

The prices were generally low, but the store seemed too big overall. While the huge variety was nice, it seemed slightly over-the-top and unnecessary for a party supply store.

We then made our way back to the checkout station at the front of the store and found ourselves in the middle of one of the largest displays of helium balloons we had ever seen.

We then made our way back to the checkout station at the front of the store and found ourselves in the middle of one of the largest displays of helium balloons we had ever seen.

We entered the check-out line via this popcorn-styled balloon arch and made our way to the front to get a better look.

We entered the check-out line via this popcorn-styled balloon arch and made our way to the front to get a better look.

Party City had every type of balloon for every occasion, from birthdays to baby showers.

Party City had every type of balloon for every occasion, from birthdays to baby showers.

It felt like balloons were a huge part of the Party City experience. The helium balloons were certainly heavily featured in this store.

It felt like balloons were a huge part of the Party City experience. The helium balloons were certainly heavily featured in this store.

In fact, the checkout section had a register entirely devoted to the "balloon center."

In fact, the checkout section had a register entirely devoted to the "balloon center."

There were a bunch of different latex and foil balloons to choose from. A solid-colored foil balloon went for about $3 and some 24-inch solid-colored helium latex balloons went for about $7.

There were a bunch of different latex and foil balloons to choose from. A solid-colored foil balloon went for about $3 and some 24-inch solid-colored helium latex balloons went for about $7.

There were even some miniature balloons available ...

There were even some miniature balloons available ...

... as well as some helium tanks for shoppers to fill their own balloons at home.

... as well as some helium tanks for shoppers to fill their own balloons at home.

With balloons taking up such a large section of the store, it was no surprise that the helium shortage has affected Party City, even if it didn't directly cause any of the recently announced store closures.

With balloons taking up such a large section of the store, it was no surprise that the helium shortage has affected Party City, even if it didn't directly cause any of the recently announced store closures.

As Party City acquires new sources for helium, it might be able to weather the shortage. But other experiences we had —like the overstuffed and somewhat messy stores — persist and might explain the move to close more stores.

As Party City acquires new sources for helium, it might be able to weather the shortage. But other experiences we had —like the overstuffed and somewhat messy stores — persist and might explain the move to close more stores.
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