99 Cents Only Stores, a discount retail chain with locations in California, Texas, Arizona, and Nevada, announced on Thursday that it will be shutting down its business operations. The company has been facing challenges with rising costs and shrinkage for several years now. Shrinkage refers to higher merchandise losses from various factors such as customer errors, damage, internal losses, and shoplifting.
In a press release, Mike Simoncic, the interim CEO of 99 Cents, stated that the decision to close was extremely difficult and not what they had hoped for. The retailer has struggled in the retail environment over the past few years due to challenges from the COVID-19 pandemic, changing consumer demand, increased levels of shrinkage, inflationary pressures, and other economic headwinds.
To manage the liquidation of its merchandise, fixtures, furnishings, and equipment at its 371 stores, 99 Cents has entered into an agreement with financial services company Hilco Global. Additionally, Hilco Real Estate will oversee the sales of the store locations in the four states where the chain operates.
As part of winding down its operations Mike Simoncic will step down from his role as interim CEO and Chris Wells will take on position as chief restructuring officer. Reports from Bloomberg indicated that 99 Cents was considering a bankruptcy filing before announcing its decision to wind down business operations.
