The 99 Cents Only Stores have announced they are closing all 371 of their stores.
Interim CEO Mike Simoncic said, “This was an extremely difficult decision and is not the outcome we expected or hoped to achieve.”
Overcoming a Host of Unexpected Challenges
Simoncic explained in a statement that a variety of issues has led to the closure.
He said, “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.”
Liquidation Sales Mark the Beginning of the End
With the impending closure affecting stores in California, Arizona, Nevada, and Texas, the upcoming liquidation sales on Friday were the start of winding down operations.
Bloomberg previously reported that the company was consider filing for bankruptcy, however, the company revealed that after working with legal and financial advisors, they concluded that closing down “was necessary and the best way to maximize the value of 99 Cents Only Stores’ assets”
Feedback from Shoppers as Stores Wind Down
With the closure imminent, Santa Ana shoppers are seizing the chance to grab last-minute bargains.
Julie Ann Mckenzie noted, “Inflation has been high…So that’s why I shop here. And it is close to home.”
Efforts from Local Government to Aid Displaced Workers
CBS News reports that Los Angeles County Supervisor Janice Hahn is taking steps to help workers affected by the store closures.
“I am worried about the thousands of 99 Cents Only Store workers across L.A. County who are going to lose their jobs, but L.A. County is ready to help. We have a department that can step in during an event like this and help workers with not only short-term assistance to get through this difficult time, but job training and support to help them get a better job,” she announced.
Aiming for Value Maximization through Strategic Liquidation
A collaboration with Hilco Real Estate is set to manage the liquidation of merchandise and fixtures, following in-depth discussions on sustaining business operations.
According to the Los Angeles Times, roughly 14,000 were employed in stores.
Decades of Serving the Discount Retail Market
Since its founding in 1982, 99 Cents Only Stores has been a staple in the discount retail space.
The decision to liquidate demonstrates the broader challenges within the retail industry. This announcement comes less than a month after one of the leading dollar stores in the world, Dollar Tree, revealed that they would be closing nearly 1000 Family Dollar stores.
Widespread Struggles in the Dollar Store Sector
Facing a sector-wide crisis, the closure reflects ongoing struggles among dollar stores with inflation and theft, NPR notes.
However, Dollar General’s contrasting expansion plans showcase the diverse outcomes for businesses in the discount retail sector.
Differing Strategies for Dollar Stores
The Wall Street Journal reports that the difference in success between dollar store chains could be attributed to their locations.
They suggest that one of the reasons that Dollar General continues to thrive is down to their strategy of focusing on rural areas, which have much less competition.
Navigating Financial Strains with Pricing Strategy Adjustments
In recent years, the company adjusted its famous pricing policy to manage rising operating costs, a departure from its original pricing strategy.
This change was an attempt to try and navigate the financial challenges and unpredictable nature of the retail sector.
Social Media Reactions
Following the announcement of the store closures, people took to social media to share their disappointment at the news.
One user wrote, “First dollar tree now 99 cent store which has been a lifesaver for me in certain times crazy.” Another person commented, “This is so sad, as a single mom with 2 of my 4 kids with autism where I buy them all food and snacks.”
The Store’s Role in Affordable Shopping
For many individuals, 99 Cents Only Stores has been a crucial place for affordable shopping, especially during financial hardships.
As one social media user wrote, “I’ve been going the 99 cent store my whole life and it’s been a store that has helped keep our family from going hungry. I’m able to find everything here and this is devastating.”
