By Dietrich Knauth
NEW YORK (Reuters) - Budget retailer 99 Cents Only filed for Chapter 11 bankruptcy protection in Delaware on Sunday, saying that it intended to close all of its 371 stores in the U.S. and sell off its real estate and remaining inventory.
The company operates under the business names "99¢ Only Stores" and "The 99 Store," with locations in California, Arizona, Nevada, and Texas. It said that inflation had made its business model unsustainable.
The company's interim CEO Mike Simoncic announced the company's impending shutdown late last week, saying: "This was an extremely difficult decision and is not the outcome we expected or hoped to achieve."
99 Cents Only sells everyday household items, basic grocery items, and seasonal and party merchandise, much of which was priced at or below 99 cents. The company, headquartered in Tustin, California, had over 10,800 part-time and full-time employees at the time of its bankruptcy filing.
In Chapter 11, the company intends to sell off its remaining inventory and real estate. It has lined up a bankruptcy loan that will provide $35.5 million in new funding for the company.
The company plans to close 125 stores by April 30, and shut down the remaining locations by May 31, according to court documents filed on Monday in Wilmington, Delaware, bankruptcy court.
99 Cents Only has hired Hilco Global to manage its going-out-of-business sales and assist in its real estate liquidation. The stores will offer up to 30% discounts on remaining inventory and will honor existing gift cards and merchandise credits until April 19, the company said.
99 Cents Only has over $1 billion in both assets and liabilities, according to its Chapter 11 petition.