Michelle Thompson99 Cents Only Stores, a discount chain operating in California, Texas, Arizona, and Nevada, is in the process of winding down its business operations, as announced in a press release from the company on Thursday.
Similar to numerous retailers navigating the aftermath of the pandemic, this West Coast chain has faced challenges such as escalating costs and shrinkage—referring to increased merchandise losses due to various factors like customer errors, damage, internal losses, and shoplifting.
Mike Simoncic, the interim CEO of 99 Cents, expressed the difficulty of the decision, stating, “This was an extremely difficult decision and is not the outcome we expected or hoped to achieve.” He attributed the company’s struggles to a combination of factors including the enduring impact of the COVID-19 pandemic, evolving consumer preferences, elevated levels of shrinkage, persistent inflationary pressures, and broader macroeconomic challenges, all of which have impeded the company’s operations.
In response to this situation, the company has entered into an agreement with financial services firm Hilco Global to conduct the liquidation of its merchandise. Additionally, it will collaborate with Hilco Global to dispose of fixtures, furnishings, and equipment across its 371 stores. The sales of its store locations in the four states will be managed by Hilco Real Estate.
As part of the restructuring, Mike Simoncic will step down from his position, with Chris Wells assuming the role of chief restructuring officer.
Reports from Bloomberg last week suggested that 99 Cents Only Stores was contemplating a bankruptcy filing.
