99 Cents Only Stores, a discount chain operating in California, Texas, Arizona, and Nevada, has announced that it is winding down its business operations. The decision comes after the retailer faced challenges related to rising costs and shrink, which refers to higher merchandise losses from various factors such as customer errors, damage, internal losses, and shoplifting. The company’s interim CEO, Mike Simoncic, expressed disappointment in having to make this difficult decision, citing the impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, inflationary pressures, and other macroeconomic headwinds as factors that have hindered the company’s ability to operate successfully in recent years.
As part of the wind-down process, 99 Cents Only Stores has entered into an agreement with financial services company Hilco Global to liquidate its merchandise and dispose of fixtures, furnishings, and equipment at its 371 store locations. Additionally, Hilco Real Estate will manage the sales of the store locations in the four states where the chain operates. In light of these developments, interim CEO Mike Simoncic will be stepping down from his role, with Chris Wells set to serve as chief restructuring officer. The company’s decision to liquidate its assets comes following reports that it was considering a bankruptcy filing, as reported by Bloomberg.
The challenges faced by 99 Cents Only Stores in recent years highlight the struggles that many retailers have experienced in the aftermath of the pandemic. Rising costs, increased merchandise losses, changing consumer behaviors, inflationary pressures, and other economic headwinds have made it difficult for the company to sustain its operations. Despite efforts to adapt to the changing retail landscape, including exploring potential bankruptcy filings, the company ultimately decided to wind down its business operations and liquidate its assets in collaboration with Hilco Global.
The decision to wind down operations and liquidate assets is a significant development for 99 Cents Only Stores, a long-standing discount chain known for offering affordable products to customers across multiple states. The company’s partnership with Hilco Global for the liquidation process and store sales reflects its commitment to responsibly managing its closure and ensuring the best possible outcome for its stakeholders. By appointing a new chief restructuring officer and transitioning leadership roles, the company aims to navigate the wind-down process effectively and minimize disruptions for employees, customers, and business partners.
As 99 Cents Only Stores embarks on the process of winding down its business operations, it faces challenges related to the liquidation of merchandise, fixtures, and equipment across its store locations. The involvement of Hilco Global in managing the liquidation process and sales of store locations underscores the need for a strategic approach to maximize value for the company’s assets. The transition to new leadership under a chief restructuring officer signals a shift in the company’s focus towards managing the wind-down process efficiently while addressing the needs of its stakeholders. Despite the challenges ahead, the company remains committed to completing the wind-down process in a responsible and transparent manner.
