On a fateful Friday the 13th in 1982, David Gold opened the first 99 Cents Only store in Los Angeles, setting a precedent with a peculiar pricing strategy. Rather than traditional retail pricing, Gold priced products at 99 cents. The unusual proposition intrigued customers, heavily promoting what would soon be known as the ’99 cent store.’
The store’s success didn’t dwindle over the years; quite the contrary, the low-cost enterprise grew exponentially. By 2011, 289 outlets located in California, Texas, Arizona, and Nevada had been established. Ares Management of Los Angeles and the Canada Pension Plan Investment Board later acquired the business, running it to unprecedented heights.
Facing bankruptcy: The iconic 99 Cents Only store’s journey
In a mere three years, the number of outlets doubled, spreading the institution’s influence throughout the United States.
Fast-forward to the present, the business has revamped budget shopping and opened employment opportunities for the masses. However, the recent announcement of the store’s liquidation has precipitated disarray and concern, especially among economically disadvantaged communities that heavily relied on the store’s cheap goods and job opportunities.
A combination of negative impacts, including the COVID-19 pandemic, rising crime rates, intensifying competition, and spiraling operational costs, predominantly from growing wage bills, led to the store’s looming closure. Despite the setback, the management appreciates their loyal customers and dedicated employees for their unfailing support over the years.
Despite various attempts, including negotiations with 32 prospective buyers for a potential restructuring plan, the company could find no reprieve and had to bow down to bankruptcy. This move has left staff members anxious about their job security moving forward.
99 Cents Only declared a Chapter 11 bankruptcy protection filing with substantial debts, including $60 million owed to its top 30 most significant unsecured creditors and $457 million from loans and credit lines. The company’s liquidation sales, offering up to 30% off, are already in motion and aim to wrap up by April 19.
In conclusion, the iconic 99 Cents Only, once differentiated by David Gold’s ingenious pricing strategy, unfortunately, finds itself on the brink of closure due to escalating challenges and a raft of unfortunate circumstances.
