(ProsperNews.net) – All 371 99 Cent Only stores are to close down, with company executives blaming inflation. Opened in 1982, 99 Cent stores operated under a “lowest price guaranteed” promise, but announced in early April that the liquidation process was underway.
In a press release, the company said it had agreed with Hilco Global to liquidate merchandise and sell off buildings and equipment. It confirmed the closure of all 371 outlets and said Hilco Real Estate would manage real estate sales in California, Nevada, Texas, and Arizona. Chris Wells of Alvaraz and Marsal was appointed Chief Restructuring Officer.
Mike Simonic, interim chief executive of the company, said, “This was an extremely difficult decision and is not the outcome we expected or hoped.” He described the circumstances leading to the group’s wind-down, including the “unprecedented” impact of the coronavirus pandemic and “persistent inflationary pressures.”
Simonic thanked staff and insisted the company did all it could to prevent liquidation and stay in business, but following months of attempts, it determined that winding down was the only way to ensure it could maximize the value of its assets.
The loss of the bargain store comes soon after Family Dollar announced it was shutting 600 outlets. Family Dollar also blamed inflation but said it would continue to trade despite the closures. Dollar Tree, which owns Family Dollar, was recently censured by the US Department of Labor’s Occupational Safety and Health Administration for violations at several locations. In February, the firm paid a $41 million fine for storing food and drugs at a rat-infested warehouse in Arkansas.
The 600-outlet closure represents 6% of the company’s overall storefront assets. CEO Rick Dreiling said he would continue to seek out unprofitable locations that are not considered to have a long-term future.
Dollar General, another nationwide firm, is doing better, analysts say. The company opened its 20,000th store last year, and experts say its running expenses are lower, particularly real estate costs, because it focuses primarily on rural locations.
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