(March 8, 2024) -- Commerce, CA-based 99 Cents Only Stores LLC said Thursday afternoon it would close all 371 stores. The company agreed with Hilco Global to liquidate all merchandise and dispose of certain fixtures, furnishings, and store equipment. Sales under this agreement are expected to begin on Friday.
Hilco Real Estate manages the sale of the company’s assets, both owned and leased, in Arizona, California, Nevada, and Texas. To help facilitate the wind-down, the company appointed Chris Wells, managing director at Alvarez & Marsal, as chief restructuring officer. Mike Simoncic, interim CEO of 99 Cents Only Stores and managing director at Alvarez & Marsal, will step down.
“This was a tough decision and is not the outcome we expected or hoped to achieve,” said 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. We deeply appreciate the dedicated employees, customers, partners and communities who have collectively supported 99 Cents Only Stores for decades.”
Founded in Los Angeles in 1982, 99 Cents Only Stores maintained a tradition for decades of selling TVs for 99 cents to the first few customers at each store opening. Reuters reported that its liquidation announcement comes a few weeks after Dollar Tree announced that it would close 970 of its Family Dollar stores as the retailer looks to revamp the struggling business. The company posted a $1.71-billion loss for the quarter ending Feb. 3, compared to a $452.2-million profit in the year-ago period.
Shares of the Chesapeake, VA-based company Dollar Tree fell about 14% in early trading after it also projected 2024 sales and profit below expectations.
Reuters reported that dollar stores have struggled following a shift in consumer spending to lower-margin essentials from higher-margin discretionary goods. Competition from rivals such as Walmart and Chinese e-commerce platform Temu is another headwind.
“Our biggest problem right now is getting enough merchandise into the stores fast enough so the consumer can respond,” said CEO Rick Dreiling, adding that Family Dollar was continuing to be hurt by macroeconomic uncertainties.
The company, which operates around 16,774 stores, said it would close about 600 Family Dollar stores in the first half of the fiscal year 2024 and 370 more over a few years, along with 30 Dollar Tree outlets, as lease terms expire.