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Fewer people are heading out shopping, even to the low-cost discount retailers. Recently, Family Dollar announced plans to close around 1,000 stores as a cost-cutting measure, and now comes word that 99 Cents Only Store LLC is likely preparing to declare bankruptcy.
The chain began in the 1960s with the novel idea to sell everything in the store for 99 cents or less. The idea was a hit and the company grew to over 370 locations with distribution centers in Texas and California. The stores offer everything from fresh produce to household items to party merchandise and gifts, though these days not everything is 99 cents or less anymore.
It's been especially rough times for the chain lately. According to Bloomberg distressed debt reporter Erin Hudson, last year, the retailer lost over $27 million, far worse than the $8 million they lost the year before. Gross margins fell and shoplifters took a big toll on them as well. The chain sold their California distribution facility to help cover some costs, but as yet, they haven't been able to turn things around.
Insiders told Bloomberg that 99 Cents Only Store LLC is considering bankruptcy. Per their sources, "The more-than-370-store company is also weighing potential liquidation since a sales process for some of its assets has stalled... Discussions are ongoing, multiple options including an out-of-court agreement are being considered and stores remain open."
A bankruptcy filing could come any day.