“Popular Discount Retailer Closes All Stores: Liquidation Sales Now Underway”

According to The Street, The past year has been devastating for the retail sector. Many non-essential retailers were forced to take on significant debt during the COVID-19 pandemic, struggling to maintain operations while facing months of limited revenue. Even as stores reopened, the burden of rent and salaries remained, creating a precarious financial situation for numerous chains.

Supply Chain Struggles

Smaller retailers found themselves at a disadvantage compared to larger competitors. While industry giants like Walmart, Target, and Dollar General were better equipped to negotiate favorable prices, smaller chains faced more severe supply chain disruptions. Major players like Costco even leased their own ships to keep costs predictable, further widening the gap between them and smaller retailers.

As a result, while some companies, like David’s Bridal and Party City, managed to restructure and exit bankruptcy, others, including Bed Bath & Beyond, Christmas Tree Shops, and Tuesday Morning, transitioned from Chapter 11 reorganizations to liquidation.

A Storied Brand’s Closure

Now, another well-known brand, with roots dating back to the 1960s, has announced its decision to liquidate and close all its stores.

The Challenge of Competing in the Dollar Store Market

Despite operating 371 locations, 99 Cents Only is dwarfed by market leaders Dollar General, which boasts over 19,000 stores, and Dollar Tree, with more than 16,000. This disparity in scale provides these discount retailers with a significant purchasing advantage, particularly amid ongoing supply chain issues, making it increasingly difficult for smaller players to compete.

Also read: Social Security announces 4 new payments for SSDI in October 2024

Founded in the 1960s by Dave Gold, 99 Cents Only began as a unique experiment selling products at a fixed price of 99 cents. The concept quickly gained popularity, leading to the opening of the first official 99 Cents Only store in 1982. The chain is known for offering a diverse range of products, including fresh produce and seasonal merchandise, not typically found in traditional dollar stores.

Announcement of Store Closures

While 99 Cents Only has not filed for bankruptcy, the company has made the difficult decision to close down and liquidate its stores.

The retailer has entered into an agreement with Hilco Global to liquidate all merchandise and dispose of various store fixtures and equipment. Liquidation sales began on April 5, 2024, across all 371 locations.

Additionally, Hilco Real Estate will manage the sale of the company’s real estate assets, both owned and leased, in Arizona, California, Nevada, and Texas.

Difficult Decisions Amid Challenges

“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” said interim CEO Mike Simoncic. “Unfortunately, the last several years have presented significant and lasting challenges in the retail environment, including the unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures, and other macroeconomic headwinds, all of which have greatly hindered the company’s ability to operate.”

Following Simonic’s resignation, the company appointed Chris Wells, Managing Director at Alvarez & Marsal, as Chief Restructuring Officer to navigate this challenging transition.