99 Cents Only Stores, a discount chain with locations in California, Texas, Arizona, and Nevada, has announced that it is winding down its business operations due to challenges such as rising costs and shrink, which includes higher merchandise losses. The company’s interim CEO, Mike Simoncic, stated that the decision was difficult and not what they had hoped for, but they faced significant challenges in the retail environment, including the impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, inflationary pressures, and other macroeconomic headwinds.
In response to the decision, 99 Cents has entered into an agreement with financial services company Hilco Global to liquidate its merchandise and dispose of fixtures, furnishings, and equipment at its 371 stores. Additionally, Hilco Real Estate will oversee the sales of the chain’s store locations in the four states where it operates. As part of the restructuring, Chris Wells will assume the role of chief restructuring officer, while Simoncic will step down from his position as interim CEO.
Reports indicated that 99 Cents Only Stores had been considering a bankruptcy filing prior to the announcement of the decision to wind down its business operations. The company’s challenges with rising costs, shrink, and other retail environment issues have contributed to the difficult situation they now face. The unprecedented impact of the COVID-19 pandemic, changing consumer preferences, and ongoing economic pressures have all played a role in hindering the company’s ability to operate effectively.
As part of the winding down process, 99 Cents Only Stores will be working closely with Hilco Global to manage the liquidation of their merchandise and assets. This will involve selling off inventory, fixtures, furnishings, and store locations to recoup some of the company’s value. The decision to wind down operations is a result of the numerous challenges that the company has faced in recent years, which have made it increasingly difficult for them to continue operating profitably in the current retail environment.
The closure of 99 Cents Only Stores locations in California, Texas, Arizona, and Nevada will have an impact on employees, customers, and the retail landscape in those areas. The chain’s unique business model of offering deeply discounted products at a fixed price point will be missed by many consumers who have come to rely on the stores for affordable shopping options. The company’s decision to wind down its operations highlights the ongoing challenges that retailers face in today’s rapidly changing marketplace.
Moving forward, 99 Cents Only Stores will focus on liquidating its merchandise, assets, and store locations as part of the winding down process. The company’s decision to work with Hilco Global to manage the liquidation reflects their commitment to efficiently and effectively wind down their operations while mitigating the impact on employees and other stakeholders. As the retail industry continues to evolve and face challenges, the closure of 99 Cents Only Stores serves as a reminder of the need for adaptability and resilience in the face of changing market dynamics.
