99 Cents Only Stores LLC, a prominent name in the discount retail sector, has announced its decision to shut down operations and enter into liquidation.
This decision comes after exhaustive efforts to navigate through the challenging retail landscape were met with insurmountable difficulties, leading to an orderly wind-down of the business.
Liquidation Sales Begin
Starting April 5, 2024, 99 Cents Only Stores will begin liquidating all merchandise across its 371 stores located in California, Texas, Arizona, and Nevada.
The company has partnered with Hilco Global for the liquidation process, which includes selling off merchandise, fixtures, furnishings, and equipment. The sales are expected to draw significant consumer attention, offering an opportunity to purchase goods at deeply discounted rates.
Real Estate Assets for Sale
In addition to merchandise liquidation, Hilco Real Estate (HRE) is overseeing the sale of the company’s real estate assets, encompassing both owned and leased properties across the four states where the stores are located. This move is part of the comprehensive strategy to maximize the value of the company’s assets during the wind-down phase.
Leadership Changes and Challenges
The company has appointed Chris Wells, Managing Director at Alvarez & Marsal, as Chief Restructuring Officer to oversee the liquidation process. Mike Simoncic, who served as the Interim Chief Executive Officer and is also a Managing Director at Alvarez & Marsal, will step down following the announcement.
Reflecting on the decision, Simoncic expressed deep regret, citing several years of significant challenges that have plagued the retail environment. Factors such as the impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures, and other macroeconomic headwinds have severely impacted the company’s operations.
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The End of a Discount Legacy
Founded in 1982, 99 Cents Only Stores has been a staple in the discount retail market, offering a broad assortment of name-brand and attractively priced merchandise along with compelling seasonal product offerings.
The decision to wind down comes after a thorough analysis and pursuit of all available alternatives to keep the business afloat. However, the current retail environment and a liquidity shortfall, as reported by Bloomberg a week prior to the announcement, have led to this difficult but necessary decision to close the business.
This closure not only marks the end of a discount retail legacy but also reflects the ongoing challenges within the retail sector. As 99 Cents Only Stores commences its liquidation sales, customers will have a final opportunity to take advantage of deals while the company seeks to maximize the value of its remaining assets.
