99 Cents Only Stores LLC has announced it will be shutting down all operations, affecting scores of locations across Greater Palm Springs and beyond. The popular discount retailer, known for its vast array of products priced at just under a dollar, has filed for Chapter 11 bankruptcy as it seeks to liquidate its assets amid severe financial difficulties.
The bankruptcy filing, lodged in the United States Bankruptcy Court for the District of Delaware, marks the beginning of what the company describes as an “orderly wind-down” of its business operations. The company’s demise was driven by a complex mix of factors, including adverse market conditions, the economic impact of the COVID-19 pandemic, shifting consumer demand, and persistent inflationary pressures, which have together created an unsustainable operating environment.
To manage its exit, the company has secured $60.8 million in debtor-in-possession financing, which includes $35.5 million in new funds. This financing is crucial for supporting the company’s operations and workforce during the wind-down phase. All 371 store locations are currently hosting going-out-of-business sales, slashing prices to clear out inventory, an event that has attracted large crowds seeking one last bargain.
In Greater Palm Springs, the closures will affect locations in Palm Springs, Cathedral City, Palm Desert, La Quinta, and Desert Hot Springs. These closures signal a significant reduction in affordable shopping options for local residents. The company has employed legal services from Milbank LLP, financial guidance from Jefferies LLC, and restructuring advice from Alvarez & Marsal to navigate through the bankruptcy process.
Chris Wells from Alvarez & Marsal has been appointed as the Chief Restructuring Officer to oversee the process. According to Mike Simoncic, the interim CEO who will be stepping down, the decision to close was difficult and came after exhaustive efforts to save the business. “This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” Simoncic explained. He acknowledged the deep impacts of recent economic challenges which have “greatly hindered the Company’s ability to operate.”
As the stores begin their final sales, the community prepares to say goodbye to a beloved source of affordable goods. The company has also announced that it will be selling off its real estate assets, managed by Hilco Real Estate, spanning across Arizona, California, Nevada, and Texas, in a bid to maximize the value returned to creditors.
