New lease of life for bankrupt 99 Cents Stores as rival discount retailer saves 11 locations from closing for good

SEVERAL 99 cent stores have been saved from bankruptcy thanks to rival discount retailer Ollie’s.

Ollie’s announced on May 24 that it will acquire 11 former 99 Cents Only stores, preventing them from closing forever.

On April 4, 99 Cents Only announced that it would close all of its stores.

The discount chain filed for Chapter 11 bankruptcy less than a week later.

At the time, the chain had 371 locations in California, Arizona, Nevada and Texas.

99 Cents Only Stores owed its top 10 creditors nearly $35 million, according to court documents.

RESCUED FROM BANKRUPTCY

The bankrupt chain has been given new life thanks to Ollie’s, the largest U.S. retailer of clearance and overstock merchandise.

Ollie’s said the U.S. Bankruptcy Court for the District of Delaware approved its $14.6 million bid for 99 Cents stores, per Diving into Retail.

All 11 acquired stores are in “key markets” in Texas, according to Ollie’s.

Three are owned properties and eight are rented.

The store acquisitions are expected to be completed early next month.

“We are very excited to be announced as the winner of the tender for these stores,” said Ollie CEO John Swygert.

“These stores are the right size, located in good shopping areas, have attractive rents and leasing structures and have served value-oriented customers for many years.

“Texas is a great market for us, with enormous growth potential and continues to benefit from strong population growth.”

EXPANDING OLLIE’S

Ollie’s operates 516 stores in 30 states, but is looking to increase its store presence.

The retailer shared in a March earnings call that it has room to expand to 1,300 locations, up from its previous target of 1,050.

Acquiring 99 Cents Only stores is a step on Ollie’s path to a larger store.

“We are maintaining our goal of 50 new stores, minus two planned closures, for fiscal 2024 and are in the early stages of evaluating the impact on our new store opening cadence this year,” Swygert said.

As for the new locations in Texas, Ollie plans a quick turnaround.

“We are focused on getting these stores up and running as quickly as possible, given the occupancy expenses we will begin to incur upon closure,” said the CEO.

In other store closing news, Red Lobster has closed 17 restaurants in a single state as the bankruptcy bloodbath continues to sweep the US.

Additionally, a beloved supermarket will close in just a few days, creating a “food desert” – shoppers have three options for purchasing their groceries.