According to The Street, The past year has been a retail bloodbath, primarily due to the Covid-19 pandemic, which forced many non-essential retailers to take on significant debt. During lockdowns, these retailers experienced months of minimal revenue while still being obligated to pay rent and salaries.
Challenges for Smaller Chains
The challenges were particularly pronounced for smaller retail chains, which faced more severe supply chain issues compared to their larger counterparts. Major retailers like Walmart, Target, and Dollar General had more negotiating power to secure better prices, even amid shortages. In fact, giants like Costco managed to lease their own ships, allowing them to maintain predictable costs. Smaller chains, lacking such leverage and burdened with debt, found themselves unable to compete, leading many to bankruptcy.
Some retailers, including David’s Bridal and Party City, successfully restructured and emerged from bankruptcy. However, others, such as Bed Bath & Beyond, Christmas Tree Shops, and Tuesday Morning, failed to stabilize their finances, shifting from Chapter 11 reorganizations to liquidation.
A Storied Brand Faces Closure
Now, another well-known brand with roots tracing back to the 1960s has opted to liquidate and close all its stores. 99 Cents Only, which operates 371 locations, has a rich history. The chain began in Los Angeles when founder Dave Gold inherited a small liquor store and decided to sell bottles of wine at a fixed price of 99 cents. This concept proved to be an instant success, leading him to expand the model to a wider array of products. The first 99 Cents Only store opened in 1982, and as the brand grew, it offered items that set it apart from typical dollar stores.
Unique Offerings in a Competitive Market
Unlike many dollar stores, 99 Cents Only has provided fresh produce and a variety of quality products, ranging from everyday household items to seasonal merchandise. Their offerings included name-brand closeouts and essential grocery items, making them a unique player in the discount retail market.
However, despite its historical significance, 99 Cents Only has decided to close down and liquidate its stores. While it has not filed for bankruptcy, the company has entered into an agreement with Hilco Global to liquidate all its merchandise and dispose of fixtures and equipment in its stores.
The Liquidation Process Begins
Liquidation sales began on April 5, 2024, across all 371 store locations. Additionally, Hilco Real Estate will manage the sale of the company’s real estate assets in Arizona, California, Nevada, and Texas.
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” stated interim CEO Mike Simoncic. He acknowledged the numerous challenges the company has faced in recent years, including the lasting effects of the Covid-19 pandemic, shifting consumer demands, rising shrink levels, persistent inflation, and various macroeconomic headwinds. These factors have significantly hindered the company’s ability to operate effectively, leading to this unfortunate decision to close its doors for good.
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