After Chapter 11 bankruptcy filing, retail chain may get lifeline
According to The Street, Usually, when a retail chain hires a liquidation firm, it’s often seen as the end of the line. While recent history has shown that some brand names may return, and physical stores could reappear in a different form years later, it typically marks a significant shift for the company.
When a company decides to liquidate, it usually means all options to keep operating have been exhausted. This includes seeking new funding sources and exploring potential buyers for its assets. For instance, David’s Bridal filed for Chapter 11 bankruptcy and was on the verge of shutting down when an investor stepped in to rescue the brand. However, in the cases of Christmas Tree Shops, Tuesday Morning, and Bed Bath & Beyond, no such lifeline was thrown, leading to their liquidation.
99 Cents Only Stores’ Current Situation
This same narrative seemed to apply to 99 Cents Only Stores, which hired Hilco Global, a liquidation firm, to manage the wind-down of its operations.
On April 4, 2024, the company announced its plan to close all stores. “The company has entered into an agreement with Hilco Global to liquidate all merchandise owned by the company and dispose of certain fixtures, furnishings, and equipment at the company’s stores,” the announcement stated. Sales began on April 5, 2024, across all 371 locations.
In addition to liquidating its inventory, 99 Cents Only is also working to sell its real estate assets. “Hilco Real Estate is managing the sale of the company’s real estate assets, both owned and leased, in Arizona, California, Nevada, and Texas,” the company shared.
A Community Connection
Founded in 1982, 99 Cents Only Stores LLC operates nearly 371 stores across California, Texas, Arizona, and Nevada. Unlike many low-cost retailers, the chain has a deep connection to the communities it serves, offering fresh produce and a diverse range of merchandise that goes beyond the traditional dollar-store model.
Also read: “At-Home Fitness Company Files for Chapter 11 Bankruptcy: Industry Impact Explored”
A Glimmer of Hope: A Potential Rescue
Despite the bleak outlook, there may be a lifeline for 99 Cents Only. Mark J. Miller, a former executive at Big Lots and Pic ‘N’ Save, is leading efforts to save 143 Southern California locations. Miller has formed a consortium of investors, including former 99 Cents Only executives, with plans to acquire and rebrand the stores, emphasizing a “treasure hunt” shopping experience.
The court must approve any sale since the company has filed for Chapter 11 bankruptcy. Historically, bankruptcy courts have favored bids that keep stores open, as seen in the case of David’s Bridal.
“It’s a passion for me to try and do this deal because I think it’s such an iconic brand name and has such a great feel for Southern California,” Miller told Los Angeles Magazine. He has been working for about 90 days to prepare his bid, and despite the challenges presented by the Chapter 11 filing, he remains optimistic.
The Importance of Affordable Retail
Miller believes saving these stores is crucial for the communities they serve. “This group of customers is priced out of other chains,” he explained. “It stretches their buying power, especially today. That’s why this is a passion for me.”
As the story of 99 Cents Only Stores continues to unfold, the future remains uncertain, but the potential for revival offers a glimmer of hope for the brand and the communities that rely on it.
