A massive retailer who closed all stores now files for bankruptcy allowing the company to implement the wind-down of its business operations.
Just days after announcing it would liquidate, 99 Cents Only Stores on Sunday filed for Chapter 11 bankruptcy in Delaware.
The retailer’s parent company, Number Holdings, said the bankruptcy process will enable the company to implement the wind-down of its business operations, per Retail Dive.
99 Cents Only listed assets and liabilities ranging from $1 billion to $10 billion.
The company’s top 10 creditors are collectively owed just under $35 million, according to the court documents.
99 Cents Only said it has secured $60.8 million in debtor-in-possession financing, subject to court approval, to facilitate the wind-down process.
Going-out-of-business sales have begun at all 371 of the company’s stores.
The California-based company said Friday that after years of challenges, including the COVID-19 pandemic, inflation, rising shrink and changing consumer demand, the company was unable to identify any solutions that would enable it to stay in business.
“In light of those challenges, retailers have been forced to rethink their business operations,” Rich Traub, a corporate real estate attorney and partner at Smith, Gambrell & Russell, said in emailed comments.
Traub specializes in retail-related real estate matters.
“The current economic environment does not mean doom, gloom, and collapse for retailers, but demands new thinking and new approaches in order to march forward.”
As of Monday, 99 Cents Only had over 10,800 part-time and full-time employees with stores in California, Arizona, Nevada and Texas, according to court documents.
The company said it has filed customary motions with the court to support its operations, including payment of employees, through the wind-down process. Hilco Global is handling merchandise liquidation for 99 Cents Only.
The retailer said gift cards and merchandise credits will be honored through the close of business on April 19.
Fixtures, furniture and equipment are also for sale.
The first 99 Cents Only store opened in 1982.
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Other Economy News Today
A massive beverage company now files an unexpected bankruptcy to ‘focus on the best interests of its creditors and other stakeholders.’
Boisson, which curates the best collection of non-alcoholic spirits, beers, and wines as well as mixology supplies including shrubs, syrups, mixers, and more has filed for Chapter 11 bankruptcy protection.
The company also shuttered its eight brick-and-mortar stores, according to multiple media reports and a LinkedIn blog post by Boisson founder Nicholas Bodkins.
However, the non-alcoholic (NA) beverage brand plans to continue operating as a wholesaler and a DTC ecommerce retailer, reports Retail Touch Points.
Boisson had taken a “neighborhood stores” approach to brick-and-mortar expansion, opening stores in NYC, San Francisco, Los Angeles and Miami.
“Boisson’s Board of Directors has determined that entering into a restructuring process for the company to shift its operational focus is in the best interests of its creditors and other stakeholders,” Bodkins wrote.
“This and other difficult decisions have been made, including the decision to close all retail locations.
While this is certainly disappointing, taking these actions will allow the company the opportunity to put forth a restructuring plan aimed to focus on the wholesale distribution and ecommerce divisions, which continue to operate, accepting and fulfilling orders without interruption.”
Bodkins took pains to stress that Boisson’s setback is not a failure for the NA category at large.
“No one should consider this anything other than what it is: a failed venture-backed startup that grew too quickly, made mistakes, and wasn’t able to find capital fast enough to continue to build three businesses at the same time (bricks-and-mortar retail, ecommerce, and wholesale import/distribution), which in hindsight, proved to be impossibly hard to execute,” he wrote.
“I am proud that we served more than 250,000 customers, of the deep and meaningful wholesale partners who embraced NA for their customers, and proud of the awareness and education we brought to consumers, introducing them to NA through partnerships we forged with brands and communities,” Bodkins added.
Detailed information about Boisson’s restructuring plans was not available at press time.
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Also Read: A Massive Grocery Chain With 400 Stores Is Now Closing
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