After it was announced Friday that 99 Cents Only stores would be closing all 371 of its nationwide locations, the Turlock location at 701 N. Golden State Blvd. within the Turlock Town Center began the process of clearing inventory and grappling with the reality of shutting down.
“It’s hard for some of us because we don’t really know what’s next or when we’ll even close,” said one employee named Angelica.
Last month, 99 Cents Only entered into an agreement with Hilco Global to liquidate all merchandise owned by the company and dispose of certain fixtures, furnishings and equipment at each of the nationwide locations. Sales under this agreement began on Friday when the initial announcement of the store closures was made through a press release. Additionally, Hilco Real Estate is managing the sale of the company's real estate assets, both owned and leased, in Arizona, California, Nevada and Texas.
To help facilitate the wind-down, the company has appointed Chris Wells, Managing Director at Alvarez & Marsal, as Chief Restructuring Officer. Mike Simoncic, Interim Chief Executive Officer of 99 Cents Only stores and Managing Director at Alvarez & Marsal, will step down.
Simonic cited the COVID-19 pandemic, inflation and retail theft as main reasons for the nationwide closures.
"This was an extremely difficult decision and is not the outcome we expected or hoped to achieve," said Simoncic. "Unfortunately, the last several years have presented significant and lasting challenges in the retail environment, including the unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures and other macroeconomic headwinds, all of which have greatly hindered the Company's ability to operate. We deeply appreciate the dedicated employees, customers, partners, and communities who have collectively supported 99 Cents Only Stores for decades."
According to data provided on March 12 by the United State Labor Department, the annual inflation rate in the country was 3.2% for the 12 months ending in February, compared to the previous rate of 3.1%. The next inflation update is scheduled for release on the morning of April 10. As for retail theft, the National Retail Federation found that the average shrink rate in their latest study in 2022 increased to 1.6%, up from 1.4% in 2021. When taken as a percentage of total retail sales, that represents $112.1 billion in losses in 2022, up from $93.9 billion in 2021.
“While retail shrink encompasses many types of loss, it is primarily driven by theft, including organized retail crime,” the NRF states.
99 Cents Only claimed in their press release that they “engaged in an extensive analysis of all available and credible alternatives to identify a solution that would allow the business to continue. 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.”
Employees at the Turlock location currently do not have a timetable as to how long they will remain open, as it all depends on how much inventory they can sell in the coming days. But one thing is for certain: “It’s sooner rather than later,” one employee chimed in.
Nearly everything inside the Turlock store is discounted. And while Tuesday saw large lines of people with full carts, there is still quite a lot laying around, from frozen food, sodas, snacks, toiletries, arts and crafts supplies, toys, dining utensils and more.
99 Cents Only stores was founded in 1982 by Dave Gold, who at the age of 50 opened the first store in Los Angeles.
