99 Cents Only Stores announced on Thursday that it would shut down all 371 of its locations, bringing an end to its operations after more than 40 years in business.
The discount chain, founded in 1982, said that it made the decision after conducting “an extensive analysis” of available alternatives with its financial and legal advisors to maintain operations.
After months of pursuing these alternatives, the company determined that “an orderly wind-down” was necessary and the best way to maximize the value of its assets.
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” Mike Simoncic, interim chief executive officer of 99 Cents, said in a press release.
Mr. Simoncic cited “the unprecedented impact of the COVID-19 pandemic, shifting consumer demand, and rising levels of shrink” as the reasons behind the closure.
These issues, along with “persistent inflationary pressures” and other macroeconomic headwinds, have “greatly hindered the company’s ability to operate,” he added.
“We deeply appreciate the dedicated employees, customers, partners, and communities who have collectively supported 99 Cents Only Stores for decades,” Mr. Simoncic said.
The company said that it has entered into an agreement with financial services firm Hilco Global to liquidate all of its merchandise and dispose of certain fixtures, furnishings, and equipment at its stores.
Sales are expected to begin on April 5 and will be carried out at all 371 locations.
Mr. Simoncic will step down from his role and Chris Wells, managing director at Alvarez & Marsal, will serve as chief restructuring officer to facilitate the wind-down process, according to the company’s statement.
Dollar Tree Closing Down 600 Stores
Just last month, another discount chain, Dollar Tree, announced plans to close around 600 Family Dollar stores in the first half of fiscal year 2024.This initiative is part of a comprehensive strategy to improve the company’s profitability and operational efficiency by focusing on stores under the Dollar Tree umbrella that perform better than the underperforming Family Dollar portfolio, which was purchased by Dollar Tree in 2015.
In addition, about 370 Family Dollar and Dollar Tree stores are slated for closure at the end of their respective lease terms, further underscoring the company’s commitment to refining its store network and focusing on high-performing locations.
Company leaders said during an earnings call on March 13 that “shrink,” a category of lost inventory that can include theft, increased throughout 2023.
