Commerce, Calif. — 99 Cents Only Stores LLC plans to close all 371 of its stores and wind down its business operations. The company has entered into an agreement with Hilco Global to liquidate all merchandise and dispose of fixtures, furnishings and equipment at the stores. Sales under this agreement began on April 5.
99 Cents Only was founded in 1982 as a deep-discount retailer where every item cost less than a dollar. The company is headquartered in the southeast Los Angeles suburb of Commerce, and currently operates stores in California, Texas, Arizona and Nevada.
The company consulted its financial and legal advisors to find a way to continue operating, but ultimately decided the wind-down was necessary and the best way to maximize the value of its assets.
Hilco Real Estate will manage the sale of the company’s owned and leased real estate assets. The company has appointed Chris Wells, managing director at Alvarez & Marsal, as chief restructuring officer. Additionally, Mike Simoncic, interim CEO of 99 Cents Only and managing director at Alvarez & Marsal, will step down.
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” says 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.”
While the discount segment was recently a top performer among retailers, this is the second sign of weakness for the segment in less than a month. In March, Dollar Tree announced that it will close 1,000 stores nationwide, mostly under the Family Dollar brand that the company bought in 2015.
— Channing Hamilton
SOURCE: www.REBusinessOnline.com