Retail chain closed after Chapter 11 bankruptcy makes major comeback
The company's shutdown was shocking and many communities will be happy that its shuttered locations are reopening under another name.
It has been a rough period for discounters that use the dollar-store model.
Supply-chain issues and rising costs have led many companies that use the dollar price point to abandon that model. Rather then the gimmick of every item costing a dollar — a cost point that change into always very limiting — many chains have pivoted to a value-based model.
Related: Beer brand skips Chapter eleven financial disaster, heads to liquidation
Even the usage of a broader range of price points, these chains face heavy competition from massive retailers including Walmart and Target. Both those chains have embraced discounts and value, responding to budget-stressed out consumers.
In many ways the retail space has mirrored fast food, where consumers have pushed brands to present $5 value meals. Those bundles are low-margin for the restaurant chains offering them, but they drive foot traffic, and some customers buy greater than simply the $5 value meal.
The present economy, while healthy, still suffers from inflation driving prices higher and consumers' perception of prices leaving them thinking they've increased tons greater than they've. Or not it's a tricky situation that has forced thousands of outlets to close and some to close down entirely.
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Well known discount chain shut down without warning
One among those chains, Ninety 9 Cents Best, change into a surprising casualty given the company's long history and deep community ties.
"Founded in 1982, Ninety 9 Cents Best Stores LLC currently operates nearly 371 stores located in California, Texas, Arizona and Nevada. Ninety 9 Cents Best Stores LLC offers a broad assortment of name brand and other attractively priced merchandise and compelling seasonal product offerings," the chain posted on its web page.
That history hit a brick wall on April Four when Ninety 9 Cents Best Stores said it'll be closing all its stores.
"The corporate has entered into an agreement with Hilco Global to, among other things, liquidate all merchandise owned by the company and put off certain fixtures, furnishings, and equipment at the company's stores," consistent with the posting. "Sales below this agreement are expected to start up April 5, 2024, and may perhaps also be carried out at all 371 of the company's store locations."
Ninety 9 Cents Best started with that gimmick, but in latest years it has used numerous price points. In many markets, it offered fresh food in communities where that change into challenging to come by.
"The Ninety 9 Cents Best Stores serve communities with fresh produce and a large assortment of quality products, from everyday household items to fresh produce to an exhilarating assortment of seasonal and party merchandise, including decorations, costumes, and gifts," the company posted.
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Ninety 9 Cents Best locations are reopening
While the Ninety 9 Cents Best brand is not going to be likely to come back in any meaningful way, about half its leases were purchased by Dollar Tree (DLTR) . That chain has all of a sudden reopened about half the 171 locations it took over and more are coming quickly.
"We're also happy to announce that as of this day, we now have reopened approximately eighty five former Ninety 9 Cents Best locations as Dollar Trees. Correctly, any other 20 stores are reopening tomorrow and the remaining fifty six should reopen by the tip of the year," Dollar Tree Chief Operating Officer Mike Creedon said at some stage within the chain's second-quarter earnings call.
The COO change into proud of how quickly the chain made the transition.
"Getting this done from scratch in lower than 100 days required a enormous effort across a pair of teams. That's an actual accomplishment. I'd prefer to thank everyone involved for all their challenging work," he added.
More financial disaster stories:
- Every other popular ice cream brand files for Chapter eleven financial disaster
- Well known burger chain faces likely Chapter eleven financial disaster
- Huge shipping company files Chapter eleven financial disaster to liquidate
The converted stores should profit on being in a position to serve the needs of the former Ninety 9 Cents Best locations.
"These Ninety 9 Cents Best locations are proven, top quality stores in strong markets with great growth potential," Creedon said. "We're very attracted to expanding our footprint across California and the Southwest and we couldn't be more proud of the reception we now have received from the communities who've welcomed us."
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