Popular Discount Retailer Closes All Stores and Begins Liquidation Process
The retail industry has faced a turbulent year, with many chains succumbing to the financial pressures brought on by the COVID-19 pandemic. Non-essential retailers, in particular, were forced to take on significant debt as they endured months of limited revenue during lockdowns while still covering overhead costs such as rent and salaried employees. Smaller retailers were especially vulnerable, grappling with supply chain challenges that their larger competitors, like Walmart, Target, and Dollar General, could navigate more easily. Big chains, with their superior negotiating power and ability to secure better deals, found ways to maintain stability. Companies like Costco even leased their own ships to control shipping costs, putting smaller chains at a further disadvantage.
While some retailers, such as David’s Bridal and Party City, managed to restructure and emerge from bankruptcy, others, including Bed Bath & Beyond, Christmas Tree Shops, and Tuesday Morning, were not as fortunate. These companies shifted from Chapter 11 bankruptcy proceedings to liquidation. Now, another long-standing retailer, 99 Cents Only, has decided to close all its stores and liquidate its assets.
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99 Cents Only: A Different Kind of Dollar Store
99 Cents Only has been a unique player in the discount retail space. With 371 locations, the chain was much smaller compared to leaders like Dollar General and Dollar Tree, which have over 19,000 and 16,000 stores, respectively. This scale gave those chains an upper hand in negotiating and purchasing power, a key advantage during the supply chain disruptions that have affected smaller competitors.
99 Cents Only has a rich history, dating back to the 1960s when founder Dave Gold inherited a liquor store in downtown Los Angeles. Gold experimented by selling bottles of wine at a fixed price of 99 cents, which proved to be wildly popular. This success led to the opening of the first 99 Cents Only store in 1982. Unlike many other dollar stores, the chain offered fresh produce and a wide range of products, including household items, seasonal merchandise, and name-brand closeouts.
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99 Cents Only Stores Closing
While 99 Cents Only has not filed for bankruptcy, the company has opted to wind down operations and liquidate its stores. The company announced the closure of all 371 stores and began sales on April 5, 2024. They have partnered with Hilco Global to liquidate merchandise, fixtures, and other assets. Additionally, Hilco Real Estate will manage the sale of the company’s real estate holdings across Arizona, California, Nevada, and Texas.
In a press release, interim CEO Mike Simoncic expressed deep regret over the decision, acknowledging the numerous challenges that have impacted the business, including the COVID-19 pandemic, inflation, and shifting consumer behavior. Simoncic has since stepped down, and Chris Wells, Managing Director at Alvarez & Marsal, has been appointed Chief Restructuring Officer to oversee the liquidation process.
The liquidation marks the end of an era for 99 Cents Only, a company that served its communities for over four decades, providing affordable goods in an increasingly competitive retail landscape.
