- 99 Cents Only Stores, a discount chain with branches in several states, is winding down operations.
- It's selling its 371 stores and will liquidate its merchandise and fixtures.
- The company blamed a number of factors including the pandemic, shrink, and inflation.
Discount chain 99 Cents Only Stores is closing down.
The retailer, which has 371 stores in California, Texas, Arizona, and Nevada, said on Thursday that it was winding down its business operations.
It will have liquidation at all its stores and will also sell its real estate.
"This was an extremely difficult decision and is not the outcome we expected or hoped to achieve," Mike Simoncic, interim CEO of the company, said in a statement.
The chain sells a range of items including fresh produce, food cupboard items, home goods, and beauty products. It also sells products by name brands — ones shown on its website include Nivea, Lego, and Heinz — which it says it gets from big-box stores that over-order.
Some of 99 Cents Only Stores' products are obtained through liquidation deals. The company owns its own fleet of trucks "to keep costs down."
The chain, which opened its first store in Los Angeles in 1982, originally charged 99 cents for most of its items.
Over the last two decades, the company has deviated from this price "to provide our customers with a wider assortment of product offerings and extreme value products and also to keep pace with rising operating costs," it said.
In 2008, it raised the price of 99-cent products to 99.99 cents. "In almost all instances, this price was rounded up to one dollar at the register, and since that time, that is the amount a customer will be charged for merchandise at this price point," the company said.
It said that over the years, it has also increased the number of products it sells priced at more than $1.
Other discount chains have struggled to stick by low price points, too. Dollar Tree — the last of the US' three big dollar-store chains to stick to $1 — moved away from the price point in 2021.
The pandemic, shrink, and inflation
Simoncic, who will step down from his role, cited factors such as the pandemic, shifting consumer demand, rising levels of shrink, and persistent inflationary pressures as hindering the company's ability to operate.
The pandemic caused major shifts in the way that people shop, with a huge jump in online shopping. The last few years have also been characterized by high inflation, which has pushed up operating costs.
The company said that it had conducted an "extensive analysis" of ways to continue operating. "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," it added.