99 Cents Only chain store announces nationwide closure

COMMERCE: United States chain stores “99 Cents Only” announced closure of all its 371 stores nationwide on Friday.

According to sources, the decision was deemed necessary due to financial constrains. The company is undergoing a complete liquidation process.

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The chain stores’ Interim Chief Executive Officer (CEO) stated that it was not a “desired outcome” for the company. Various factors contributed to the countrywide-closure, including the global economic impact of the Covid-19 pandemic, change in consumer tastes and preference, and global inflationary pressures. All of these combined impeded the company’s operational capabilities.

The closure affects almost 14,000 employees. However, the company was quick to point out that the closure came about after “extensive analysis and exploration of alternatives” to sustain the business.

The company said that despite months contemplation and pursuing other alternatives, it was forced to make this decision.

99 Cents Only, however, is determined to carry out a systematic wind-down of its entire operations. This way it ensures that it can maximise the value of its assets. The company reached an agreement with another entity to liquidate all of its inventory, stock and real estate holdings.

This is the second time a discount brand had to shut its doors. Early this year, another famous discount store “Dollar Tree” announced closure of hundreds of “Family Dollar” stores, one of its subsidiary.

Experts have cited factors such as stagnant wages, inflation, and shrinkage losses as having contributed to the difficulties that led to the closures.

Established in 1982, 99 Cents Only Stores became known for its strict 99 cent price tags on a wide variety of goods, popularizing the single-price retail concept. However, economic pressures in 2008 prompted the company to deviate from its traditional pricing strategy. Following a change in ownership in 2011 and the departure of the family management team in 2013, the company faced challenges in maintaining its market position amidst a shifting landscape.

99 Cents Only opened its door to the public for the first time in 1982, and will close its door to the public in 2024.

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The chain store used to offer its consumers branded merchandise on extremely cheap prices. The discount store also sold general goods and fresh produce. In the beginning, every item was priced at 99 US cents, sometimes even less.

However, following the Great Recession in 2007-2008, the base price was adjusted to 99.99 cents. The company also began charging more for higher-priced items.

The company also owned “Bargain Wholesale”, an overseas entity that specialised in providing wholesale products and exporting goods to more than 15 countries globally.