BIG UPDATE: After Chapter 11 bankruptcy closures, retail stores find new life
According to The Street, The sudden closure of 99 Cents Only Stores shocked many communities, but there’s good news as its shuttered locations are reopening under a new name. The discount retail space has faced numerous challenges, especially for stores using the dollar-store model.
Challenges Facing Dollar-Store Model
Rising costs and supply-chain issues have made it difficult for companies to maintain the traditional dollar price point. Many discount chains, once known for pricing every item at $1, have pivoted to a value-based model with a wider range of price points. Even with this change, they face tough competition from retail giants like Walmart and Target, both of which offer discounts and cater to budget-conscious consumers.
Much like fast-food chains have introduced low-cost value meals to draw customers, dollar stores have had to adapt to survive. Despite a relatively healthy economy, inflation continues to push prices higher, leading to widespread closures of retail locations, including some long-standing discount chains.
99 Cents Only Stores Abruptly Shuttered
One of the most surprising casualties in the discount space was 99 Cents Only Stores, a chain with deep community ties. The company, founded in 1982, operated 371 stores across California, Texas, Arizona, and Nevada, offering a broad assortment of low-cost merchandise and fresh food in many underserved communities.
However, on April 4, 99 Cents Only announced it would be closing all its stores. The company entered an agreement with Hilco Global to liquidate its inventory and dispose of store fixtures. The liquidation began on April 5, 2024, across all 371 store locations.
Despite moving away from its original $0.99-only pricing, the chain continued to serve as a vital resource for affordable goods, fresh produce, and seasonal products. Its closure marked a significant loss for many of the communities it had served.
Dollar Tree Reopens 99 Cents Only Locations
Although the 99 Cents Only brand is unlikely to make a comeback, about half of its leases were purchased by Dollar Tree. The discount chain has already reopened nearly half of the 171 locations it acquired and is on track to reopen the rest by the end of the year.
“We’ve reopened approximately 85 former 99 Cents Only locations as Dollar Trees,” said Dollar Tree COO Mike Creedon during the company’s second-quarter earnings call. “Another 20 stores are reopening tomorrow, and the remaining 56 should reopen by the end of the year.”
Creedon praised the company’s efforts to quickly transition the stores, calling it a “massive effort” that was completed in less than 100 days.
Expansion and Community Reception
The converted stores are expected to thrive in the markets previously served by 99 Cents Only. “These 99 Cents Only locations are proven, high-quality stores in strong markets with great growth potential,” Creedon said. Dollar Tree is excited to expand its footprint across California and the Southwest and has received a warm welcome from the communities where stores have already reopened.
