Another discount retailer bites the dust in the U.S. due to compounding economic stresses, leaving West Coast dollar store shoppers bereft.
99 Cents Ending
Shoppers in states like California and Nevada are flooding into the iconic 99 Cents Only discount stores after the chain announced last Friday that it would be closing all 371 of its outlets.
CEO Speaks Out
CEO Mike Simoncic released a statement on Friday, explaining that after years of financial struggle, the company had no choice but to close its doors for good.
Several Factors
He pointed to the run-on effects of the COVID-19 pandemic, rising inflation, changing consumer interest and demand, and increasing levels of “shrink.”
Shrink refers to inventory lost through shoplifting, employee theft, administrative errors, etc.
Filing for Bankruptcy?
He explained that these factors had “greatly hindered the Company’s ability to operate.” According to Bloomberg, the discount chain had been considering filing for bankruptcy for some time.
“An Extremely Difficult Decision”
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” Simoncic stated. “Unfortunately, the last several years have presented significant and lasting challenges in the retail environment.”
Shoppers Left in the Dust
While shoppers on the West Coast are flocking to their local 99 Cents Only stores to take advantage of liquidation sales and to enjoy the chain stores’ offerings for the last time, some have been left feeling disgruntled over the closures.
Customers “Very Disappointed”
KSWB-TV San Diego spoke to 99 Cents Only customers, one of whom claimed they were “very disappointed” by the closures.
Upsetting News
“It’s a great place, so it’s kind of upsetting,” another shopper told reporters.
Four Decades of Discounts
The discount variety chain was founded in Los Angeles in 1982 by Dave Gold. It eventually spread from California to Arizona, Nevada, and Texas and became a staple for many shoppers.
No Longer 99 Cents
At first, the chain offered a huge variety of products, branded merchandise, and produce for just 99 cents apiece. Eventually, prices were raised in the 2000s to meet the inflation rate.
Closing in Four States
The closing of all 371 stores has led to liquidation sales across all four states, which will include the clearing out of all of its merchandise as well as “certain fixtures, furnishings and equipment at the company’s stores.”
Employees Hit Hard
However, the shutdown of the 99 Cents Only brand will have a deep impact beyond liquidation sales and disappointed customers. Store employees will also be hit hard.
14,000 Out of Work
According to the Los Angeles Times, the company hired around 14,000 employees. These store closures will threaten their livelihoods.
A County-Wide Solution
Los Angeles County Supervisor Janice Hahn drew public attention to his issue after suggesting to the county board that a report should be made on ways to support 99 Cents Only employees.
“LA County Is Ready to Help”
“I am worried about the thousands of 99 Cents Store workers across L.A. County who are going to lose their jobs, but L.A. County is ready to help,” she said in a public statement on Friday, shortly Simoncic’s announcement.
They Can Step In
“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,” she continued. “But job training and support to help them get a better job.”
Looking for Alternatives
The company spent months consulting financial advisers and considering alternative ways to keep the chain store alive, ultimately deciding that a “wind-down” of stores was the best option.
“Orderly Wind-Down Was Necessary”
“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,” their public statement read.
Dollar Tree Closures
The closure of 99 Cents Only follows a recent announcement by discount retail giant Dollar Tree, which shared its plans to shutter 1000 stores last month.
An Industry Trend?
Experts, like the University of San Diego economics professor Alan Gin, believe that the close proximity of these closures might “indicate that there is some weakness in terms of this part of the retail sector.”
The post Dollar Store Giant 99 Cents Only Shutters All Outlets Across West Coast first appeared on Wealthy Living.
Featured Image Credit: Shutterstock / Eric Glenn.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
