The discount chain 99 Cents Only announced on Friday that it will close all 371 of its stores in the US as part of an “orderly wind-down” of the business.
In a statement, the company’s interim CEO, Mike Simoncic, said 99 Cents Only had been under economic pressures that had “greatly hindered the company’s ability to operate”.
“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,” Simoncic said. “This was an extremely difficult decision and is not the outcome we expected or hoped to achieve.”
Last week, Bloomberg reported that the company was considering filing for bankruptcy after experiencing a deficit, but the company in a statement said that it worked with financial and legal advisers to determine that closing stores “was necessary and the best way to maximize the value of 99 Cents Only Stores’ assets”.
The company, which was founded in 1982, has locations in California, Arizona, Nevada and Texas. It has about 14,000 employees in its stores, according to the Los Angeles Times.
The announcement comes less than a month after Dollar Tree, one of the largest dollar-store chains in the country, said it would close nearly 1,000 Family Dollar stores, with 600 stores closing this year and another 370 stores over the next few years. Dollar Tree, the parent company of Family Dollar, operates a total of 16,000 stores in the US.
Family Dollar was recently fined $40m for operating a rat-infested warehouse, what the US justice department said was the largest food safety fine in history.
“Persistent inflation and reduced government benefits continue to pressure the lower-income consumers that comprise a sizable portion of Family Dollar’s customer base,” the Dollar Tree CEO, Rick Dreiling, said in a call with analysts in March. Dreiling said that while the majority of items in Dollar Tree and Family Dollar stores will “remain at our entry-level fixed price point”, the company was also hoping to integrate more products at a higher price point in stores.
Even as 99 Cents Only and Dollar Tree have struggled as dollar-store brands, Dollar General, the largest of the discount-chain companies, has heavily expanded its presence in recent years. The company announced in February that it had opened its 20,000th store, with plans to open 800 new stores this year.
Analysts have said the dollar-store brands have had different strategies over the years, with Dollar Tree focused on more urban populations while Dollar General focusing on more rural areas of the country where there are fewer competitors.
