According to The Street,The past year has been nothing short of a retail bloodbath, exacerbated by the COVID-19 pandemic, which forced many non-essential retailers to significantly increase their debt. During lockdowns, these businesses faced months of minimal revenue while still being obligated to pay rent and staff salaries. Smaller chains encountered even greater challenges, particularly with supply chain disruptions, making it difficult to compete with larger retailers like Walmart and Target, who could negotiate better prices and even charter their own ships to manage costs.
While some retailers, such as David’s Bridal and Party City, successfully restructured and emerged from bankruptcy, many others—like Bed Bath & Beyond, Christmas Tree Shops, and Tuesday Morning—failed to stabilize their finances and moved from Chapter 11 reorganizations to liquidation.
Now, another storied brand with roots dating back to the 1960s has announced it will close all its stores.
A Different Kind of Dollar Store
Although 99 Cents Only operates 371 locations, this number pales compared to the market leaders Dollar General and Dollar Tree, which boast over 19,000 and 16,000 stores, respectively. This disparity provides a significant advantage in purchasing power, especially in the current climate of supply chain issues.
Founded by Dave Gold, 99 Cents Only Stores began its journey in the 1960s when Gold turned a small liquor store into a successful venture by selling bottles of wine for 99 cents each. The concept quickly expanded, and the first official 99 Cents Only store opened in 1982. Unlike many dollar stores, 99 Cents Only has offered a diverse range of products, including fresh produce and household items, along with seasonal merchandise and name-brand closeouts.
Announcement of Liquidation
Although the company has yet to file for bankruptcy, 99 Cents Only has made the decision to liquidate and close its stores. “The company has entered into an agreement with Hilco Global to liquidate all merchandise and dispose of certain store fixtures and equipment,” the company stated.
Liquidation sales commenced on April 5, 2024, across all 371 locations. Additionally, Hilco Real Estate will manage the sale of the company’s real estate assets, including both owned and leased properties in Arizona, California, Nevada, and Texas.
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” said interim CEO Mike Simoncic. He cited the significant challenges facing the retail environment, including the lasting impact of the COVID-19 pandemic, changing consumer demands, increasing levels of shrink, persistent inflation, and other macroeconomic headwinds that have hindered the company’s operations.
With Simonic stepping down, Chris Wells, Managing Director at Alvarez & Marsal, has been appointed as Chief Restructuring Officer to navigate the company’s next steps.
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