For many budget-conscious shoppers, 99 Cents Only is a one-stop source for household essentials, party supplies, pet care, cleaning products, and select groceries. But unfortunately, fans of the discount chain will have to take their business elsewhere. One week after Bloomberg reported that 99 Cents Only was mulling bankruptcy amid a “liquidity shortfall,” the company announced its plans to close all 371 locations for good.
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After four decades of service, 99 Cents Only will conduct “an orderly wind-down of its business operations” effective April 5, 2024, the company shared in a press release. The news comes on the heels of the COVID-19 pandemic, piggybacked by surging levels of inflation and shrinking (also known as inventory loss due to shoplifting or internal errors, such as missing money).
"This was an extremely difficult decision and is not the outcome we expected or hoped to achieve," 99 Cents Only Stores’ interim CEO Mike Simoncic said in the statement. "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.”
According to the 2023 National Retail Security Survey, the average shrink rate increased from $93.9 billion to $112.1 billion in losses over one year. And in response to rising retail crime, many customers are reevaluating their shopping habits. In 2023, Statista found that 24 percent of those surveyed shop in-store less frequently, and 15 percent have switched retailers entirely.
“99 Cents Only Stores, together with its financial and legal advisors, engaged in an extensive analysis of all available and credible alternatives to identify a solution that would allow the business to continue. Following months of actively pursuing these alternatives, the company ultimately determined that an orderly wind-down was necessary and the best way to maximize the value of 99 Cents Only Stores' assets,” the company explained.
In an agreement with Hilco Global, 99 Cents Only will “liquidate all merchandise.” The discount chain will also work with the financial services company to unload fixtures, furnishings, and equipment at all locations in California, Arizona, Texas, and Nevada. Additionally, Simoncic will step down from his role as Chris Wells steps in as chief restructuring officer.
“We deeply appreciate the dedicated employees, customers, partners, and communities who have collectively supported 99 Cents Only Stores for decades,” said Simoncic.
