The national chain of 99 Cent Only Stores — consisting of 371 locations in four states — is shutting down, with operators blaming unmanageable inflation and theft.
“This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” Mike Simoncic, Interim Chief Executive Officer of 99 Cents Only Stores, said Friday.
Simonic cited several factors for the shutdown, including the “unprecedented impact” of the COVID-19 pandemic, shifting consumer demand, persistent inflationary pressures and rising levels of shrink — an industry term that refers to inventory lost thanks to shoplifting, employee theft and administrative errors.
Combined, those issues “have greatly hindered the company’s ability to operate,” Simoncic said.
“99 Cents Only Stores, 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 ultimately determined that an orderly wind-down was necessary and the best way to maximize the value of 99 Cents Only Stores’ assets,” he said.
The move will impact the company’s 371 locations in California, Arizona, Nevada and Texas.
The 99 Cent Only Stores have already begun the process of shutting down — locations began liquidating and tossing their inventory on Friday.
The popular chain had just celebrated its 42nd year of operation when stakeholders decided to shutter it.
99 Cents Only Stores joins a growing list of staple businesses to buckle under the pressure of mounting inflation.
Last month, Dollar Tree announced it would close 1,000 stores collectively between its namesake general discount stores and subsidiary chain, Family Dollar — shortly before hiking up its price cap to $7.
Macy’s also revealed plans to shut down 150 stores, about 30% of its US namesake chain.
Inflation remains stubbornly high, though well off the 40-year high of 9.1% in 2022.
February’s Consumer Price Index — which tracks changes in the costs of everyday goods and services — came in at 3.2%, a tick higher than the 3.1% headline inflation figure economists surveyed by FactSet expected.
Last week, the core Personal Consumption Expenditures Index — the Fed’s preferred inflation gauge which excludes volatile food and energy prices — rose 0.3% in February and 2.8% year-over-year — highlighting the difficulty in getting prices under control.
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