In a sudden and sweeping move, the discount retail chain 99 Cents Only Stores has announced it will shutter all 371 of its locations across four states, marking the end of an era for the company that has been a staple for bargain shoppers since 1982. The closures, which will affect stores in California, Arizona, Nevada, and Texas, come in the wake of a series of economic challenges that have plagued the retail sector in recent years.
"This was an extremely difficult decision and is not the outcome we expected or hoped to achieve," said Mike Simoncic, the interim chief executive officer of 99 Cents Only Stores. He cited a combination of factors that have "greatly hindered the company's ability to operate," including the unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures, and other macroeconomic headwinds.
The company has partnered with Hilco Global to facilitate the liquidation of all merchandise, along with "certain fixtures, furnishings, and equipment at the company's stores," starting Friday. Hilco Real Estate will manage the sale of the firm's real estate assets. The company's leadership is also undergoing a transition, with Chris Wells stepping in as chief restructuring officer as Simoncic steps down.
The closure of the 99 Cents Only Stores, which have been a go-to for many budget-conscious shoppers, is expected to have a significant impact on the communities they serve. In Santa Ana, California, for instance, customers were seen rushing to grab last-minute items before the store shut down for good. "Inflation has been high," said shopper Julie Ann Mckenzie. "So that's why I shop here. And it is close to home."
The closure will also leave thousands of employees jobless. In response, Los Angeles County Supervisor Janice Hahn said she would introduce a motion asking for a report on ways the county can provide support for displaced workers from the chain. "I am worried about the thousands of 99 Cents Store workers across L.A. County who are going to lose their jobs, but L.A. County is ready to help," Hahn said.
The company's decision to wind down operations follows months of exploring alternatives to keep the business afloat. However, the company ultimately determined that an orderly wind-down was the best way to maximize the value of 99 Cents Only Stores' assets. The closures mark a significant shift in the retail landscape, reflecting the ongoing challenges faced by brick-and-mortar stores in an increasingly digital and economically volatile era.
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