Number Holdings, the parent company of discount retailer 99 Cents Only, filed for bankruptcy protection on Sunday as “significant and enduring challenges” in the retail environment have hindered the company’s ability to operate. The company cited the “unprecedented” impact of COVID, the decline, shifting consumer demand and lingering inflationary pressures for its decision to close.
The company’s 371 stores will remain open while the company closes operations and sells off fixtures, fittings and fixtures, along with merchandise.
Like Dollar General (NYSE:DG) and Dollar Tree (DLTR), 99 Cents Only featured a mix of refrigerated, shelf-stable groceries and deeply discounted items. The store was also known for offering high-priced items for 99 cents to the first nine customers. After going public in 1996, 99 Cents Only was acquired in 2012 by Ares Management for $1.6 billion.
The bankruptcy filing has reverberated across the industry with shares of Dollar General (DG), Dollar Tree (DLTR) and Five Below (FIVE) falling, all of which are suffering similar headwinds to profitability. Recently,
Dollar General (DG) CEO Todd Vasos warned that customers “continue to feel the impact of the last two years of inflation which we believe is pushing them to make compromises in store”, while Dollar tree (DLTR) reported disappointing results for the fourth quarter and set pessimistic forecasts for the first quarter and 2024. The company also said it will close 1,000 Family Dollar stores this year. Five down (FIVE) further stated that high levels of contraction would have occurred for setting full-year guidance below expectations.
Dollar General (DG) stock is down 1.5%Dollar Tree (DLTR) is 1.7% lowerwhile the Five Below (FIVE) stock is in the red by 0.9%.
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