The past year has been a bloodbath in retail. This is partly because Covid forced many non-essential retailers to increase their debt load.
Many retail chains had to go through months in which they made very limited income. During that lockdown period, they still had to pay rent and salaried employees.
Additionally, smaller chains faced greater supply chain problems than their larger rivals. Larger companies like Walmart, Target, and Dollar General had greater ability to negotiate better prices even in an environment where certain goods were in short supply.
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Large companies like Costco were able to charter their own ships to keep their costs predictable. Not being able to pull some of the levers that the big chains could do and having added debt led the smaller chains to bankruptcy.
Some retailers, including David's Bridal and Party City, managed to restructure and emerge from bankruptcy proceedings. Several others, including Bed Bath and Beyond, Christmas Tree Shops and Tuesday Morning, were unable to resolve their finances and moved from Chapter 11 reorganizations to liquidation.
Now, another historic brand that has a long history dating back to the 1960s has decided to liquidate and close all of its stores.
Image source: The street
A different kind of dollar store
While 371 stores seems like a lot, it's a small number compared to market leaders Dollar General, which has more than 19,000 locations, and Dollar Tree, which has more than 16,000. Having so many locations gives discount retailers a huge advantage when it comes to shopping.
This has always been an advantage for larger chains, but in the current era of supply chain problems, it has made it very difficult for smaller players to compete.
99 Cents Only, which operates 371 locations, has a deep history.
“The stores date back to the 1960s, when company founder Dave Gold inherited a small liquor store in downtown Los Angeles and decided to test selling bottles of wine at a fixed price of 99 cents. The test “It was an instant hit. Dave thought selling everything in the store for 99 cents would be very popular,” the company shared on its website.
99 Cents Only opened its first store under that name in 1982. As it grew, the company sold items not typically associated with dollar stores.
“99 Cents Only stores serve communities with fresh produce and a wide variety of quality products, from everyday household items to fresh produce and an exciting variety of seasonal and holiday products, including decorations, costumes and gifts “The merchandise encompasses clearance sales of well-known brands and regularly available food and beverage products, such as produce, deli, and other grocery staples,” the company added.
99 Cents Only stores close
While it has not yet filed for bankruptcy, 99 Cents Only has decided to close and liquidate its stores.
“The company has entered into an agreement with Hilco Global to, among other things, liquidate all company-owned merchandise and dispose of certain fixtures, furniture and equipment in the company's stores.”
Sales began on April 5, 2024 and will take place in the company's 371 stores, 99 Cents Only shared in a press release.
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.
“This was an extremely difficult decision and is not the outcome we expected or expected to achieve,” said interim CEO Mike Simoncic. “Unfortunately, recent years have presented significant and long-lasting challenges to the retail environment, including the unprecedented impact of the COVID-19 pandemic, changes in consumer demand, rising levels of shrinkage, persistent inflationary pressures and other macroeconomic headwinds, all of which have “greatly hampered the company's ability to operate.”
READ ALSO: Costco has an answer for Sam's Club expansion plan
Simonic resigned and the company named Chris Wells, CEO of Alvarez & Marsal, as chief restructuring officer.
