99 Cent Stores make final markdowns

(Rigo Moran)

99 Cent Only Stores to close nationwide, driven by factors including retail theft and economic challenges

CENTRAL VALLEY – Citing post-pandemic problems, rising inflation and the cost of theft from its 371 stores nationwide, 99 Cents Only has officially announced the company is calling it quits and closing down all of its stores, with markdowns beginning this week.

As reported amongst various outlets, the announcement came out on Thursday, April 4. In the announcement, Mike Simoncic, Interim Chief Executive Officer of 99 Cents Only Stores, said: “This was an extremely difficult decision and is not the outcome we expected or hoped to achieve.”

According to Simoncic, 99 Cents Only Stores and its advisors explored many alternatives before making the decision, but after careful consideration, they ultimately decided that closing down stores in an orderly manner was the best way to get the most value from the company’s assets.

The company employs between 14,000 according to Yahoo Finance and 17,000 employees per reports by Zippia, most of whom were surprised to learn of the company closing stores as reported by media in Sacramento and Las Vegas. The closure will also have a ripple effect that will harm delivery drivers, distribution centers, and businesses that contract with 99 Cent Only for tasks such as maintenance and cleaning.

Employees who have spoken with media outlets in Sacramento and Las Vegas said they received a 60-day notice and will not receive a severance.

The company operates locations in California, Nevada, Arizona and Texas. According to the company website, there are three locations in Tulare County, one in Kings County and seven stores in Fresno County. An official date of full closure has not been announced, but the company plans to liquidate as much merchandise, shelving and other assets as possible before closing up shop.

Rival company Family Dollar announced in March that the chain would be closing about 1,000 stores in 2024. The closure comes on the heels of a massive lawsuit of the company selling products stored in a rat-infested warehouse, but retail theft has also been a driving factor. In 2022, Investors Business Daily reported that retail theft across all segments of the marketplace exceeded $112 billion in losses.

The company was accused by the Occupational Health and Safety Administration last year of targeting profits over worker safety after understaffed stores were violently robbed.

Retailer corporation Target has also recently announced the closing of nine locations due to retail theft and the inability to protect workers from criminal activity.

Additionally, inflation has remained a problem that particularly impacts many of the low-income shoppers who make purchases at bargain stores like 99 Cent Only. In 2008, the company added a $0.01 increase to its products, which was raised to $0.25 in 2022.

The Federal Reserve, which sets rates for borrowers that align with inflation, said previously this year they anticipated three rate reductions but were holding off until inflation had subsided. However, according to both the Consumer Price Index and the Personal Consumption Expenditures Index, key gauges of inflation in the U.S. show stubborn inflation that is not falling as quickly as anticipated by the Federal Reserve.

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