99 CENT ONLY closing

[ClownLoach]

If they did then I assume it's a straight Chapter 7 and not a Chapter 11 restructuring. Same issue though, in a Chapter 11 it may be easier to acquire the parts of the company needed to continue operations. A Chapter 7 is just a straight wind down in most cases and the timing of steps is different. The judge may just sever all of the leases that aren't resold by the company itself for example. There is less of a sense of urgency in the process so Chapter 11 cases take priority on the calendar over Chapter 7. In Chapter 11 the court is taking consideration that they are trying to save the company while ensuring a fair outcome for the creditors, and they then have to decide their fate. In Chapter 7 the fate has already been decided and there is usually no DIP financing which also messes up the usual schedule of events as they have to work with their current limited finances to wind down.

Basically what I'm saying is that the circumstances are still the same even if a filing occurred, not ideal for this team that wants to try to buy the SoCal operations. A tainted brand, liquidated empty stores with severe maintenance and repair needs based on anecdotal observations, and a long liquidation process are not likely to be resurrected. When the site has been in liquidation or closed for any length of time the customer moves on, their traffic pattern changes and someplace else will take the spot of their 99 store visits. I've been in the situation where one of my former companies competitor went out of business and we reopened in their spot only to bring in a fraction of the volume they did, and it took a long period of losses for those stores to eventually turn around. A startup firm resurrecting 99 will not be able to afford that luxury, and even though I'm sure a mass reopening would be heavily covered there will be many customers who figure out somewhere else to go during what will likely be a much longer closure than 90 days (surprised he didn't propose being closed for 99 days in line with their old marketing). Worst of all, the expectation will be perfection on day one, massive deals (loss leaders) and packed shelves. Seeing their PNS stores they are sparsely stocked and have many items that are hardly bargain priced. I just don't see how they can resurrect this chain without starting with billions of dollars in new debt, and since dollar stores are really struggling industry wide I cannot imagine any banks are going to be interested in giving loans to grow what they hear and feel is a dying category with Dollar General struggling and Dollar Tree closing hundreds of stores.

To make it official, the company filed bankruptcy only yesterday as a "Chapter 11 Liquidation" which makes little sense until you read more into it.

Furthermore, the ten largest creditors combined were only owed $35M. They were not broke at all.

This is a private equity pillaging, not a failed business. They own 44 properties primarily in LA. The owners are going to wind up walking away with billions from the sale of those properties. And when the leases are canceled there won't really be any debt, so all the proceeds will go directly to the owners as the few creditors will likely be paid off quickly if they haven't been already.

This is exactly what the private equity people would like to do to Macy's. Neglect the operation, feign a crisis, close and cash out. Chapter 11 allows them to emerge as a real estate holding company under same ownership to continue the cash out process of the owned property.

These owned property stores were most likely the profit center and most productive stores as they are concentrated in the LA area. Without them, the chain would probably collapse, and no possibility the folks attempting to buy the brand would get their hands on any of those properties. By cashing them out they in effect had to kill the company. That is why they did this wind down. No better moment than now to cash in and sell to build high rise apartments and condos before the people of California realize the alleged housing shortage is a massive scam and conspiracy created by the developers, landlords and paid off politicians to artificially increase prices and rents (by 2021 the state already had a SURPLUS of 3 million homes per the Census, and has built millions more since). It's a robbery. I hate private equity. This will likely be the most profitable killing of a viable retailer since the banks destroyed Circuit City.

They’ve been struggling with liquidity for awhile. An article published last fall notes that they’ve sold-lease backed all company-owned assets. They’ve defaulted on selective debts, deferred payment of dividends, etc. The company was truly struggling. Moody’s warned a few weeks ago, saying the company would likely have negative cash flow for awhile. One article states that they had looming large debt and leases payments coming due.

Multiple articles quote inside sources as saying foot traffic has been decreasing pretty steadily. I believe it — there’s far more competition for the core product of 99. Grocery Outlet, for example, seems to be pursuing all the Kraft Heinz products that were widely available at 99 for $1 for many years. Ethic grocers are competing hard for the subpar produce 99 has long sold. The end result… is that they have to pay more for product and raise prices to consumers.

Keep in mind… the 99, Dollar Tree, etc. didn’t pay for the name brand products that lined its shelves for years. Instead, manufactures paid THEM to dispose of the product. That’s no longer the case. Which is why Dollar Tree is desperately trying to evolve. It’s very rare these days that you can find name brand products that are being liquidated at Dollar Tree.

99 is still the price leader on many grocery and perishable items. Problem is, it’s not by much. And for what you save, you sacrifice in quality. Red delicious apples 3 lb for $3 is a great deal -a but those small apples yield little edible flesh, making them an inferior deal to the dozens of businesses selling larger apples in same 3 lb bags for $3.50-4.

People like me have abandoned them. And that’s the problem. I’ve spend thousands of hours in those stores. I loved the treasure hunt - you never knew what you were going to find for $1. But those days are long gone and they’re not coming back.

Problem is the bankruptcy filing doesn't support the narrative. Declining performance is not the same as a liquidity crisis. Do I think the stores had problems? You bet. But they were easily corrected, close all non CA stores and wipe their leases with a Ch 11. They didn't lease back much. I am sorry but this is a PE robbery.

[storewanderer]

Problem is the bankruptcy filing doesn't support the narrative. Declining performance is not the same as a liquidity crisis. Do I think the stores had problems? You bet. But they were easily corrected, close all non CA stores and wipe their leases with a Ch 11. They didn't lease back much. I am sorry but this is a PE robbery.

What can be done to stop these kind of PE robberies? Anything? Also I read 99 Only was owned by the Canadian Pension Fund? What is that? Is that some arm of the Canadian Government?

Meanwhile an interview with this Pic N Save owner. States the stores would stay the same in terms of focus on food if they can buy them but try to get it back to the treasure hunt of the past.


I think given this appears to be a private equity rape job that the idea of trying to get a group of stores, the name, infrastructure, etc. to do the "nice thing" of keeping the chain going in SoCal may not align with the private equity interests to just completely destroy this thing and extract every last cent out of it.

[veteran+]

Problem is the bankruptcy filing doesn't support the narrative. Declining performance is not the same as a liquidity crisis. Do I think the stores had problems? You bet. But they were easily corrected, close all non CA stores and wipe their leases with a Ch 11. They didn't lease back much. I am sorry but this is a PE robbery.

What can be done to stop these kind of PE robberies? Anything? Also I read 99 Only was owned by the Canadian Pension Fund? What is that? Is that some arm of the Canadian Government?

Meanwhile an interview with this Pic N Save owner. States the stores would stay the same in terms of focus on food if they can buy them but try to get it back to the treasure hunt of the past.


I think given this appears to be a private equity rape job that the idea of trying to get a group of stores, the name, infrastructure, etc. to do the "nice thing" of keeping the chain going in SoCal may not align with the private equity interests to just completely destroy this thing and extract every last cent out of it.

What can be done to stop PE's rapacious ways? Nothing, the beast has been untethered for a long while. This will continue and get worse beyond our lifetimes.

[pseudo3d]

To make it official, the company filed bankruptcy only yesterday as a "Chapter 11 Liquidation" which makes little sense until you read more into it.

Furthermore, the ten largest creditors combined were only owed $35M. They were not broke at all.

This is a private equity pillaging, not a failed business. They own 44 properties primarily in LA. The owners are going to wind up walking away with billions from the sale of those properties. And when the leases are canceled there won't really be any debt, so all the proceeds will go directly to the owners as the few creditors will likely be paid off quickly if they haven't been already.

This is exactly what the private equity people would like to do to Macy's. Neglect the operation, feign a crisis, close and cash out. Chapter 11 allows them to emerge as a real estate holding company under same ownership to continue the cash out process of the owned property.

These owned property stores were most likely the profit center and most productive stores as they are concentrated in the LA area. Without them, the chain would probably collapse, and no possibility the folks attempting to buy the brand would get their hands on any of those properties. By cashing them out they in effect had to kill the company. That is why they did this wind down. No better moment than now to cash in and sell to build high rise apartments and condos before the people of California realize the alleged housing shortage is a massive scam and conspiracy created by the developers, landlords and paid off politicians to artificially increase prices and rents (by 2021 the state already had a SURPLUS of 3 million homes per the Census, and has built millions more since). It's a robbery. I hate private equity. This will likely be the most profitable killing of a viable retailer since the banks destroyed Circuit City.

They’ve been struggling with liquidity for awhile. An article published last fall notes that they’ve sold-lease backed all company-owned assets. They’ve defaulted on selective debts, deferred payment of dividends, etc. The company was truly struggling. Moody’s warned a few weeks ago, saying the company would likely have negative cash flow for awhile. One article states that they had looming large debt and leases payments coming due.

Multiple articles quote inside sources as saying foot traffic has been decreasing pretty steadily. I believe it — there’s far more competition for the core product of 99. Grocery Outlet, for example, seems to be pursuing all the Kraft Heinz products that were widely available at 99 for $1 for many years. Ethic grocers are competing hard for the subpar produce 99 has long sold. The end result… is that they have to pay more for product and raise prices to consumers.

Keep in mind… the 99, Dollar Tree, etc. didn’t pay for the name brand products that lined its shelves for years. Instead, manufactures paid THEM to dispose of the product. That’s no longer the case. Which is why Dollar Tree is desperately trying to evolve. It’s very rare these days that you can find name brand products that are being liquidated at Dollar Tree.

99 is still the price leader on many grocery and perishable items. Problem is, it’s not by much. And for what you save, you sacrifice in quality. Red delicious apples 3 lb for $3 is a great deal -a but those small apples yield little edible flesh, making them an inferior deal to the dozens of businesses selling larger apples in same 3 lb bags for $3.50-4.

People like me have abandoned them. And that’s the problem. I’ve spend thousands of hours in those stores. I loved the treasure hunt - you never knew what you were going to find for $1. But those days are long gone and they’re not coming back.

Problem is the bankruptcy filing doesn't support the narrative. Declining performance is not the same as a liquidity crisis. Do I think the stores had problems? You bet. But they were easily corrected, close all non CA stores and wipe their leases with a Ch 11. They didn't lease back much. I am sorry but this is a PE robbery.

I'm not sure. The Texas stores were clearly a problem. They had fans, but not enough, and their new stores likely weren't going to save them. They have just 25 stores in Houston with others scattered around the state (particularly in the RGV and other border areas) but their market share in grocery is completely negligible.

The issue with wiping out leases in the non-California stores with a bankruptcy is that it destroys credit and means that there won't be a lot of resources to re-invest in California operations. (This is one reason why Chapter 11 turns into Chapter 7 within a few years).

[ClownLoach]

They’ve been struggling with liquidity for awhile. An article published last fall notes that they’ve sold-lease backed all company-owned assets. They’ve defaulted on selective debts, deferred payment of dividends, etc. The company was truly struggling. Moody’s warned a few weeks ago, saying the company would likely have negative cash flow for awhile. One article states that they had looming large debt and leases payments coming due.

Multiple articles quote inside sources as saying foot traffic has been decreasing pretty steadily. I believe it — there’s far more competition for the core product of 99. Grocery Outlet, for example, seems to be pursuing all the Kraft Heinz products that were widely available at 99 for $1 for many years. Ethic grocers are competing hard for the subpar produce 99 has long sold. The end result… is that they have to pay more for product and raise prices to consumers.

Keep in mind… the 99, Dollar Tree, etc. didn’t pay for the name brand products that lined its shelves for years. Instead, manufactures paid THEM to dispose of the product. That’s no longer the case. Which is why Dollar Tree is desperately trying to evolve. It’s very rare these days that you can find name brand products that are being liquidated at Dollar Tree.

99 is still the price leader on many grocery and perishable items. Problem is, it’s not by much. And for what you save, you sacrifice in quality. Red delicious apples 3 lb for $3 is a great deal -a but those small apples yield little edible flesh, making them an inferior deal to the dozens of businesses selling larger apples in same 3 lb bags for $3.50-4.

People like me have abandoned them. And that’s the problem. I’ve spend thousands of hours in those stores. I loved the treasure hunt - you never knew what you were going to find for $1. But those days are long gone and they’re not coming back.

Problem is the bankruptcy filing doesn't support the narrative. Declining performance is not the same as a liquidity crisis. Do I think the stores had problems? You bet. But they were easily corrected, close all non CA stores and wipe their leases with a Ch 11. They didn't lease back much. I am sorry but this is a PE robbery.

I'm not sure. The Texas stores were clearly a problem. They had fans, but not enough, and their new stores likely weren't going to save them. They have just 25 stores in Houston with others scattered around the state (particularly in the RGV and other border areas) but their market share in grocery is completely negligible.

The issue with wiping out leases in the non-California stores with a bankruptcy is that it destroys credit and means that there won't be a lot of resources to re-invest in California operations. (This is one reason why Chapter 11 turns into Chapter 7 within a few years).

This is a totally different case. Credit is asset backed, this isn't a personal bankruptcy. They had a whopping $35M in debt for the top creditors and BILLIONS in assets per the filing. BILLIONS in Assets, and remember that most liabilities are leases which skew the balance sheet thanks to accounting changes a few years ago. But it's clear that these guys didn't have any real debt, even force-fed PE debt doesn't appear to be there. Liquidate a handful of stores and you've paid off the $35M. This is a misuse of the bankruptcy courts. The PE folks could have easily reinvested in the company via their typical debt loading. How much of the cash flow were they diverting to their pockets too? My last company was forced to divert more than 100% of their pre-acquisition profits to the PE bastards that acquired them, moving from a wildly profitable company that took great care of their people to a penny-pinching layoff machine overnight that was fighting to avoid a false insolvency. I'm sure that all of these stores were under the same profit pressure where the ownership was skimming all of the profit and leaving the stores with paper losses.

The company still owns 44 properties mainly in LA. You can't even keep a damned gas station in business in LA these days even if you owned it. The property taxes alone are high because of the land value for development (although surely far less than rent). Everyone wants to redevelop your property into multi level housing that's now worth a thousand dollars a foot (and you add levels for more footage). Don't kid yourselves, these guys could do what is needed - Close the underperforming properties out of California and wipe their lease obligations, keep the rest and the returns on the liquidation alone would be adequate to satisfy the creditors. Remember that they only have to pay any overdue rent, not the entire lease if they were behind on payments for the bad Texas, Arizona etc. stores. Maybe sell one or two LA properties to a mega developer for $50 million plus a pop.

They would emerge with the core profitable California business intact, and banks would be throwing themselves at the company to give them massive credit lines secured by the owned real estate.

This is a crystal clear, explicit example of choosing to kill the company. There was a PE firm managing directly and then largest shareholder was some Canadian pension fund which is odd. But the PE guys do not care, they would sell their children on a street corner if they saw a profit opportunity. They recognize that the fake housing shortage, even with interest rate issues, is still creating billions in instant profits for developers especially in urban areas where they can still get insurance without worrying about wildfire coverage. They are going to profit in the billions, laughing all the way to the bank as they leave tens of thousands unemployed. They put this company out of business to make a quick buck on the real estate. It's crystal clear. Companies in far worse shape have avoided bankruptcy and liquidation. There were many options available, and obviously there was interest in the company as we are seeing. This was a choice, not a unavoidable outcome. This is another PE pillaging.

[pseudo3d]

Problem is the bankruptcy filing doesn't support the narrative. Declining performance is not the same as a liquidity crisis. Do I think the stores had problems? You bet. But they were easily corrected, close all non CA stores and wipe their leases with a Ch 11. They didn't lease back much. I am sorry but this is a PE robbery.

I'm not sure. The Texas stores were clearly a problem. They had fans, but not enough, and their new stores likely weren't going to save them. They have just 25 stores in Houston with others scattered around the state (particularly in the RGV and other border areas) but their market share in grocery is completely negligible.

The issue with wiping out leases in the non-California stores with a bankruptcy is that it destroys credit and means that there won't be a lot of resources to re-invest in California operations. (This is one reason why Chapter 11 turns into Chapter 7 within a few years).

This is a totally different case. Credit is asset backed, this isn't a personal bankruptcy. They had a whopping $35M in debt for the top creditors and BILLIONS in assets per the filing. BILLIONS in Assets, and remember that most liabilities are leases which skew the balance sheet thanks to accounting changes a few years ago. But it's clear that these guys didn't have any real debt, even force-fed PE debt doesn't appear to be there. Liquidate a handful of stores and you've paid off the $35M. This is a misuse of the bankruptcy courts. The PE folks could have easily reinvested in the company via their typical debt loading. How much of the cash flow were they diverting to their pockets too? My last company was forced to divert more than 100% of their pre-acquisition profits to the PE bastards that acquired them, moving from a wildly profitable company that took great care of their people to a penny-pinching layoff machine overnight that was fighting to avoid a false insolvency. I'm sure that all of these stores were under the same profit pressure where the ownership was skimming all of the profit and leaving the stores with paper losses.

The company still owns 44 properties mainly in LA. You can't even keep a damned gas station in business in LA these days even if you owned it. The property taxes alone are high because of the land value for development (although surely far less than rent). Everyone wants to redevelop your property into multi level housing that's now worth a thousand dollars a foot (and you add levels for more footage). Don't kid yourselves, these guys could do what is needed - Close the underperforming properties out of California and wipe their lease obligations, keep the rest and the returns on the liquidation alone would be adequate to satisfy the creditors. Remember that they only have to pay any overdue rent, not the entire lease if they were behind on payments for the bad Texas, Arizona etc. stores. Maybe sell one or two LA properties to a mega developer for $50 million plus a pop.

They would emerge with the core profitable California business intact, and banks would be throwing themselves at the company to give them massive credit lines secured by the owned real estate.

This is a crystal clear, explicit example of choosing to kill the company. There was a PE firm managing directly and then largest shareholder was some Canadian pension fund which is odd. But the PE guys do not care, they would sell their children on a street corner if they saw a profit opportunity. They recognize that the fake housing shortage, even with interest rate issues, is still creating billions in instant profits for developers especially in urban areas where they can still get insurance without worrying about wildfire coverage. They are going to profit in the billions, laughing all the way to the bank as they leave tens of thousands unemployed. They put this company out of business to make a quick buck on the real estate. It's crystal clear. Companies in far worse shape have avoided bankruptcy and liquidation. There were many options available, and obviously there was interest in the company as we are seeing. This was a choice, not a unavoidable outcome. This is another PE pillaging.

For "another PE pillaging", why the bankruptcy? Usually the play is to rip out valuable assets and/or load the company up with a bunch of debt, not just declare bankruptcy and shut down operations.

If we look at other attempts at PE finagling, we saw Sears as the real estate assets were plundered and store conditions deteriorate, we saw Toys R Us as they got in deep debt and unable to get out in a highly competitive and volatile industry, we saw Mervyn's as they also lost their retail estate and scaled back operations before going under.

In no case does a private equity firm decide one day to liquidate an entire company for the fun of it. We know that 99 Cents Only wasn't doing well, but there must be another angle that we're not seeing.

[ClownLoach]

I'm not sure. The Texas stores were clearly a problem. They had fans, but not enough, and their new stores likely weren't going to save them. They have just 25 stores in Houston with others scattered around the state (particularly in the RGV and other border areas) but their market share in grocery is completely negligible.

The issue with wiping out leases in the non-California stores with a bankruptcy is that it destroys credit and means that there won't be a lot of resources to re-invest in California operations. (This is one reason why Chapter 11 turns into Chapter 7 within a few years).

This is a totally different case. Credit is asset backed, this isn't a personal bankruptcy. They had a whopping $35M in debt for the top creditors and BILLIONS in assets per the filing. BILLIONS in Assets, and remember that most liabilities are leases which skew the balance sheet thanks to accounting changes a few years ago. But it's clear that these guys didn't have any real debt, even force-fed PE debt doesn't appear to be there. Liquidate a handful of stores and you've paid off the $35M. This is a misuse of the bankruptcy courts. The PE folks could have easily reinvested in the company via their typical debt loading. How much of the cash flow were they diverting to their pockets too? My last company was forced to divert more than 100% of their pre-acquisition profits to the PE bastards that acquired them, moving from a wildly profitable company that took great care of their people to a penny-pinching layoff machine overnight that was fighting to avoid a false insolvency. I'm sure that all of these stores were under the same profit pressure where the ownership was skimming all of the profit and leaving the stores with paper losses.

The company still owns 44 properties mainly in LA. You can't even keep a damned gas station in business in LA these days even if you owned it. The property taxes alone are high because of the land value for development (although surely far less than rent). Everyone wants to redevelop your property into multi level housing that's now worth a thousand dollars a foot (and you add levels for more footage). Don't kid yourselves, these guys could do what is needed - Close the underperforming properties out of California and wipe their lease obligations, keep the rest and the returns on the liquidation alone would be adequate to satisfy the creditors. Remember that they only have to pay any overdue rent, not the entire lease if they were behind on payments for the bad Texas, Arizona etc. stores. Maybe sell one or two LA properties to a mega developer for $50 million plus a pop.

They would emerge with the core profitable California business intact, and banks would be throwing themselves at the company to give them massive credit lines secured by the owned real estate.

This is a crystal clear, explicit example of choosing to kill the company. There was a PE firm managing directly and then largest shareholder was some Canadian pension fund which is odd. But the PE guys do not care, they would sell their children on a street corner if they saw a profit opportunity. They recognize that the fake housing shortage, even with interest rate issues, is still creating billions in instant profits for developers especially in urban areas where they can still get insurance without worrying about wildfire coverage. They are going to profit in the billions, laughing all the way to the bank as they leave tens of thousands unemployed. They put this company out of business to make a quick buck on the real estate. It's crystal clear. Companies in far worse shape have avoided bankruptcy and liquidation. There were many options available, and obviously there was interest in the company as we are seeing. This was a choice, not a unavoidable outcome. This is another PE pillaging.

For "another PE pillaging", why the bankruptcy? Usually the play is to rip out valuable assets and/or load the company up with a bunch of debt, not just declare bankruptcy and shut down operations.

If we look at other attempts at PE finagling, we saw Sears as the real estate assets were plundered and store conditions deteriorate, we saw Toys R Us as they got in deep debt and unable to get out in a highly competitive and volatile industry, we saw Mervyn's as they also lost their retail estate and scaled back operations before going under.

In no case does a private equity firm decide one day to liquidate an entire company for the fun of it. We know that 99 Cents Only wasn't doing well, but there must be another angle that we're not seeing.

In hindsight they obviously were preparing to loot the company of the Real Estate. They wouldn't have gotten involved without it. There are different PE approaches, not all load debt but if this one did it could have easily kicked the can down the line. They chose not to do it because the debts would be secured by the real estate assets, thus if the company failed then the banks would own them. This is an obviously low effort situation, they easily could have leveraged assets and obtained years worth of credit to make whatever changes they needed. Instead they manipulate Chapter 11 which means that as long as the few secured creditors are satisfied they can go about their business without fear of losing ownership. Since the law changed (at the request of PE firms) the leased properties can be on the books of the retailer AND their landlords as assets, and then the remaining balance due on the lease term is a liability. So you can create the appearance easily of being insolvent by just filing and listing the full balance due on the lease. Problem is that is not a true liability. The Chapter 11 process is a loophole that allows a free exit from any lease. This sounds like a obvious case where the company would not be "insolvent" if the leases weren't being recorded as liabilities.

So you have a court system that will effectively enable the looting, and will do so in a manner that also leaves these assets free and clear of future liability, say class actions from employees who become represented after the filings prove that the company was nowhere near actually being broke and options to save it were not taken seriously. It's a form of money laundering but for the purpose of ensuring nobody can sue in the future. The Real Estate is likely the only meaningful asset, but the return on selling those 44 properties obviously is going to be more than profits and returns from the chain as an ongoing entity in the near term. And since eventually the bottom is going to fall out of this bogus real estate market in California now is the best time to maximize their return on selling these sites to greedy developers who are probably all fighting over every single asset right now and trying to decide how many stories of housing can they stack on them.

Lots of good reasons to file Chapter 11... Keep the assets you want to keep and have them legally stamped "free and clear of any future legal attacks." Sever all the lease liabilities that can't be resold at zero cost instead of being responsible for paying the contracted lease severance fees. Make an incredible profit on the sale of the real estate.

This company obviously was going to head down the path of self destruction, but it was many years away from the point of no return. It could have been salvaged, but they are too lazy and too greedy to do so.

[Bagels]

ClownLatch,
It’s prwtty clear the chain is losing money and had been for quite awhile. I don’t think there’s any real estate left to sell — an article published late last year mentioned that they had sold the Commerce property out of desperation to raise cash, and it was the last remaining asset available.

It’s pretty clear what’s happened. Inflationary pressures have driven more people to look for value priced merchandise. Kraft and Unilever have been the primary source of products for 99 ever since started shopping there … and now these products are largely found at Grocery Outlet, etc. but at much higher pricing.

99 has little product to sell other than the typical dollar store junk. Prices on produce have risen to almost that of traditional supermarkets — you can get better deals at ethic markets. The expansion of such markets and Aldi have no doubt taken a bite out of the chain’s core base.

Multiple articles discuss a sharp decline in foot traffic in recent months. Not a shocker at all - people took their business elsewhere. Including me.

[ClownLoach]

ClownLatch,
It’s prwtty clear the chain is losing money and had been for quite awhile. I don’t think there’s any real estate left to sell — an article published late last year mentioned that they had sold the Commerce property out of desperation to raise cash, and it was the last remaining asset available.

It’s pretty clear what’s happened. Inflationary pressures have driven more people to look for value priced merchandise. Kraft and Unilever have been the primary source of products for 99 ever since started shopping there … and now these products are largely found at Grocery Outlet, etc. but at much higher pricing.

99 has little product to sell other than the typical dollar store junk. Prices on produce have risen to almost that of traditional supermarkets — you can get better deals at ethic markets. The expansion of such markets and Aldi have no doubt taken a bite out of the chain’s core base.

Multiple articles discuss a sharp decline in foot traffic in recent months. Not a shocker at all - people took their business elsewhere. Including me.

I have not disputed any of the store conditions, pricing issues etc. The issue is that once the real estate issue was clarified, along with the minimal true debt, it is easy to see that there was a lot more they could do to fix the problems. They obviously had made a decision that they weren't going to pursue fixing the company and instead decided to let it die so they could cash out the assets.

44 owned stores per https://www.retaildive.com/news/99-cent ... cy/712533/

"Hilco Real Estate is handling the sale of owned and leased real estate. The company said it has 333 leases and 44 owned properties. The owned properties include “highly desirable locations along well-known corridors” in Los Angeles, like Sunset Boulevard, Fairfax Avenue and Pico Boulevard. Other cities in which real estate assets will be offered include Houston; Phoenix; the Dallas/Fort Worth area of Texas; Sacramento, California; and San Jose, California."

Properties on Sunset and Fairfax based on the size of a 99 store would likely each close around $80M to $100M and would be the "Crown Jewels" of the company. Developers would eat these up because $100M for such a property in the current market is pennies to them. DFW prices are insane right now even with vast swaths of open land all over the metroplex. San Jose area is also nuts.

There is no possible way their real estate holdings aren't in the billions based on this article which pulled from the filing.

I'm hoping a website is set up with court filings as we saw for Rite Aid as that will tell the real story and either validate these concerns or refute them. But right now when you see that they went into BK holding 44 properties - that is a LOT of Real Estate for a relatively small retailer like 99, and it would have been a no-brainer for a management team that actually gave a damn about the business to seek the necessary credit secured against some of those properties to make whatever changes were necessary. I don't see any real signs that anyone tried to save this. Obviously someone within the private ownership said nobody is allowed to secure financing against the real estate, because anyone in any other retailer would leverage and lease back those buildings in a second to create new credit lines and long term debt.

Were the stores in the toilet? Absolutely, neglected and mismanaged. My last visit was around Christmas and I was pretty disgusted. But once again that is all mismanagement and neglect which could be corrected and fast. Was it worth a chapter 11? Yes, to get out of Texas and these other markets they obviously have failed in. Was it worth just going straight from filing to liquidating? No way. Someone is walking away from this with billions.

[pseudo3d]

Again I'm saying that however scummy private equity can be, they do not pull the plug on an entire chain like that unless there is something else at play that isn't well-known.

I don't think you can say "this is just another private equity looting!" when an unprecedented total liquidation is presented.