Extreme discounter to liquidate
After more than 40 years in operation, 99 Cents Only Stores LLC is going out of business.
The extreme discounter said it has entered into an agreement with Hilco Global to, among other things, liquidate all merchandise owned by the company and dispose of certain of the fixtures, furnishings and equipment at its stores. Sales are expected to start on April 5, 2024 and will be carried out at all 371 99 Cents Only stores.
Hilco Real Estate (HRE) is managing the sale of the company's real estate assets, both owned and leased, in Arizona, California, Nevada and Texas.
To help facilitate the wind-down, the company has appointed Chris Wells, managing director at Alvarez & Marsal, as chief restructuring officer. Mike Simoncic, interim CEO of 99 CentsOnly Stores and managing director at Alvarez & Marsal, will step down.
"This was an extremely difficult decision and is not the outcome we expected or hoped to achieve," said Simoncic. "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."
The news about the wind-down comes a week after Bloomberg reported that 99 Cents Only Stores, which is a private company, was considering a bankruptcy filing amid a liquidity shortfall.
In a statement, 99 Cents Only Stores said, 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 said ultimately determined that an orderly wind-down was necessary and the best way to maximize the value of 99 Cents Only Stores' assets.
Founded in 1982, 99 Cents Only Stores LLC currently operates nearly 371 stores located in California, Texas, Arizona and Nevada.