In an era marked by unprecedented challenges for brick-and-mortar retailers, the announcement of 99 Cents Only Stores closing down all of its locations signals a significant shift in the discount retail landscape. This development follows a tumultuous period for the retail industry, which has seen a spate of closures and bankruptcies as businesses struggle to navigate the post-pandemic world.
99 Cents Only Store: The Retail Apocalypse Deepens
The past year has escalated into what many are calling a retail apocalypse. The onslaught of COVID-19 forced numerous non-essential retailers into a corner, piling up debt as revenue streams dried up. During the extended periods of lockdown, retailers were burdened with ongoing expenses, from rent to salaries, despite the halted inflow of cash.
The situation was particularly dire for smaller chains, which faced insurmountable supply chain issues compared to their colossal counterparts like Walmart, Target, and Costco. These giants, with their expansive networks and deep pockets, managed to keep their supply chains relatively unscathed, further widening the gap between the industry leaders and the smaller players.
Amid these challenges, several retailers found themselves in dire straits. While some, like David’s Bridal and Party City, managed to navigate through bankruptcy proceedings successfully, others were not as fortunate. A slew of retailers, including the likes of Bed Bath and Beyond and Christmas Tree Shops, succumbed to liquidation, marking an end to their operations.
A look at why dollar store brands like Dollar Tree, Family Dollar and 99 Cents Only are closing stores as Dollar General continues to expand. https://t.co/mwNg6ljawn
— USA TODAY (@USATODAY) April 6, 2024
The Rise and Fall of a Discount Dynamo
Among the casualties of this retail reckoning is a brand with a storied legacy that dates back to the 1960s—99 Cents Only Stores. Originating from a humble liquor store in downtown Los Angeles, the concept blossomed under the vision of founder Dave Gold.
He revolutionized the discount retail model by introducing a fixed price-point strategy, selling everything in the store for 99 cents. This novel approach catapulted the brand to success, leading to the opening of its first branded store in 1982.
Unlike its mammoth competitors, 99 Cents Only maintained a relatively modest footprint with 371 locations. However, what it lacked in size, it made up for in diversity and quality of offerings. From fresh produce to seasonal merchandise, the stores served communities with a broad range of products, establishing a unique niche in the discount retail sector.
The Final Countdown
Yet, despite its rich history and unique market position, 99 Cents Only has announced a complete shutdown and liquidation of its stores. The company has partnered with Hilco Global to liquidate its merchandise and manage the sale of its real estate assets across Arizona, California, Nevada, and Texas. The liquidation sales, which began on April 5, 2024, mark the end of an era for the discount retailer.
Interim CEO Mike Simoncic expressed the difficulty of the decision, attributing the closure to the cumulative impact of various challenges over recent years.
“The unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures, and other macroeconomic headwinds have greatly hindered the company’s ability to operate,” stated Simoncic.
This closure not only reflects the hardships faced by 99 Cents Only but also serves as a microcosm of the broader struggles within the retail industry.
Looking Ahead
The closure of 99 Cents Only Stores underscores a critical juncture for the retail sector, as businesses grapple with the evolving landscape and shifting consumer preferences. The fate of this once-thriving discount retailer highlights the need for adaptation and innovation in the face of adversity.
As the industry moves forward, the lessons learned from the rise and fall of 99 Cents Only will undoubtedly shape the future of retail in the post-pandemic world.
