99 CENT ONLY closing

[HoustonRetail]

According to ads on Facebook, Sunday is the final day for all stores. I haven't inquired directly about fixtures, but I have noticed they're not selling much. Free-standing items seem to be sold while shelving and perimeters are being left alone. Maybe they had a bid for the entire lot of shelving?

That is a massive closure round to close everything left on Sunday. I think at least half of the stores are still open.

Shelving was sold at the stores that closed in my area and one store got rid of quite a bit of shelving. I don't think the others sold any shelving.

I have yet to see them sell any "backroom" stuff.

The fixture sales have been strange, especially for Hilco, who usually sells any fixture and supplies including pens and tape dispensers, notepads, used paperclips, etc.

While in the midst of this I did watch a Rite Aid closure sale run by Hilco. They did their drawn out thing. Ran it for what felt like two months. Last time I was there about 9 days ago, the employee told me the store had 10 days left. There was a group there at the store disassembling various shelves and loading them into a U-Haul as they had bought the shelves. They weren't selling supplies yet but everything else fixture-wise was for sale.

This is far different than the hundreds of Rite Aid closures that occurred through 2/2024 where Rite Aid left everything inside except carts, computers, and registers. They could reopen hundreds of stores tomorrow by putting merchandise back on the shelves and bringing in computers/registers (even the shelf tags etc are mostly still up in the closed stores).

Those Rite Aid self liquidations - I really wonder if they were playing some sort of financial game around asset abandonment or accelerated depreciation so that they could reduce their tax burden.

There doesn't seem to be any more talk of the Pic N Save guy rescuing or resurrecting this chain.

There has been something very "off" about this from day one. I still question the real estate piece as the facts showed that there were some expensive assets available to be monetized. As I mentioned before it is clear that there will be something left here when the closures are done, a holding company shell with money left in it for someone to cash out on. Seemingly few creditors to pay which aligns with the lax effort to get maximum recovery of the assets. Lack of clarity around the larger debts creating the appearance that the notes may be held by the owners and thus they have the opportunity to write off the losses but still cash out the real estate assets. Maybe even more asset abandonment accounting or accelerated depreciation write offs as well. They definitely could get a lot more from the open sites. We have a friend who lives a few blocks from an OC store still open and packed with merchandise, and she was allowed to buy a overflowing cart of any product for $20. She had a kids birthday coming up and jam packed the cart with toys, party supplies etc. And basically got hundreds of dollars of merchandise for $20 and ran the best party any of the parents had ever seen. They could easily extend the sale and get a better recovery but that does not seem to be the priority.

I agree this has been off since day one. I have seen no backroom equipment auctioned off. There were ads for their cold boxes but I don't even see those anymore. Pic n Save struck me as being full of it from day one, although I'll chalk some of that up to the media, who took a small quote that he was interested in buying some of the stores and blew it up to "he's saving the chain!" Lots of outlets have jumped on Ollie's story proclaiming that the 99 Cents Only Store isn't actually closing! Total crap, but it gets clicks.

Rite Aid hasn't had locations in Texas since buying Katz & Besthoff, and those didn't last long after the purchase. However, they did operate RediClinic locations inside of 30+ HEB locations. They suddenly and quietly closed them at the end of 2020. The space was just left behind, closed off to some extent, but not emptied or even relinquished by Rite Aid until about a year ago. Speaking with a store manager, they weren't allowed to even touch the space because it was still rented out (last year), although most of the spaces have been released within the past year.

[ClownLoach]

That is a massive closure round to close everything left on Sunday. I think at least half of the stores are still open.

Shelving was sold at the stores that closed in my area and one store got rid of quite a bit of shelving. I don't think the others sold any shelving.

I have yet to see them sell any "backroom" stuff.

The fixture sales have been strange, especially for Hilco, who usually sells any fixture and supplies including pens and tape dispensers, notepads, used paperclips, etc.

While in the midst of this I did watch a Rite Aid closure sale run by Hilco. They did their drawn out thing. Ran it for what felt like two months. Last time I was there about 9 days ago, the employee told me the store had 10 days left. There was a group there at the store disassembling various shelves and loading them into a U-Haul as they had bought the shelves. They weren't selling supplies yet but everything else fixture-wise was for sale.

This is far different than the hundreds of Rite Aid closures that occurred through 2/2024 where Rite Aid left everything inside except carts, computers, and registers. They could reopen hundreds of stores tomorrow by putting merchandise back on the shelves and bringing in computers/registers (even the shelf tags etc are mostly still up in the closed stores).

Those Rite Aid self liquidations - I really wonder if they were playing some sort of financial game around asset abandonment or accelerated depreciation so that they could reduce their tax burden.

There doesn't seem to be any more talk of the Pic N Save guy rescuing or resurrecting this chain.

There has been something very "off" about this from day one. I still question the real estate piece as the facts showed that there were some expensive assets available to be monetized. As I mentioned before it is clear that there will be something left here when the closures are done, a holding company shell with money left in it for someone to cash out on. Seemingly few creditors to pay which aligns with the lax effort to get maximum recovery of the assets. Lack of clarity around the larger debts creating the appearance that the notes may be held by the owners and thus they have the opportunity to write off the losses but still cash out the real estate assets. Maybe even more asset abandonment accounting or accelerated depreciation write offs as well. They definitely could get a lot more from the open sites. We have a friend who lives a few blocks from an OC store still open and packed with merchandise, and she was allowed to buy a overflowing cart of any product for $20. She had a kids birthday coming up and jam packed the cart with toys, party supplies etc. And basically got hundreds of dollars of merchandise for $20 and ran the best party any of the parents had ever seen. They could easily extend the sale and get a better recovery but that does not seem to be the priority.

I agree this has been off since day one. I have seen no backroom equipment auctioned off. There were ads for their cold boxes but I don't even see those anymore. Pic n Save struck me as being full of it from day one, although I'll chalk some of that up to the media, who took a small quote that he was interested in buying some of the stores and blew it up to "he's saving the chain!" Lots of outlets have jumped on Ollie's story proclaiming that the 99 Cents Only Store isn't actually closing! Total crap, but it gets clicks.

Rite Aid hasn't had locations in Texas since buying Katz & Besthoff, and those didn't last long after the purchase. However, they did operate RediClinic locations inside of 30+ HEB locations. They suddenly and quietly closed them at the end of 2020. The space was just left behind, closed off to some extent, but not emptied or even relinquished by Rite Aid until about a year ago. Speaking with a store manager, they weren't allowed to even touch the space because it was still rented out (last year), although most of the spaces have been released within the past year.

For Rite Aid in Texas and the situation you describe, this is typical of bad decisions that require smaller scale closures. Rite Aid did not have the cash to pay out the lease termination fees, which can be millions of dollars per store. When Rite Aid filed for bankruptcy they listed at least a hundred properties that were long closed but they were stuck paying rent for.

There are only a few ways to get out of a lease. First is pay the charge if one is in the contract. Many times the fee exceeds the losses the underperforming store is expected to generate over its remaining lease term so the store stays open in those cases until term ends. Second is to negotiate a termination with the landlord, who usually does not care about your financial problems unless they have a tenant they would prefer who would be willing to take over the space. Third is to identify breaches of contract, such as responsibilities the landlord is not performing or problems with the building and sue to have the contract ended, however the courts could just order the landlord to fix the problem. Next is to try selling the lease to another retailer if allowed by the contract. Sometimes this is at a loss, for example say Rite Aid is paying $20K a month and sells the lease to Dollar Tree who will only pay $15K. Rite Aid is obligated to pay the $5K difference each month. Those situations are messy at best and generally are avoided. Sales of leases in bankruptcy are more straightforward and protect the buyer. And last is to file for bankruptcy.

Bankruptcy offers retailers and others the ability to cancel leases basically for free without paying the amount due under the lease agreement. Because Rite Aid was losing so much money, and the costs of paying rent, insurance, security, taxes, fees etc. on closed stores were causing losses the best remedy for the company was to use bankruptcy to purge the books once and for all. The process is easy, the bankrupt company submits a list of leases to reject, the date of rejection, the date they will relinquish the property etc. and the court almost universally approves the request even if the landlords object.

[storewanderer]

The still open stores are now listed:

https://shopgenius.com/99-cents-only-stores/

All close Sunday as mentioned above.

Texas seems to still have the highest percentage of its stores open.

Not much left in AZ, NV, or NorCal.

[storewanderer]

Dollar Tree has bought the 99 only name, all other trademarks, brands, etc. Also they got a lot more leases...

It'll be interesting to see if they use the name or what.

Obviously they were interested in the leases.

[storewanderer]

Docket 694- Dollar Tree purchases hundreds of leases and all intellectual property
This docket has 112 leases and all intellectual property.

The 112 leases in Docket 694- it says Dollar Tree agreed to purchase "shelving" in those stores for $1,724,767.

It appears they are paying $115,000 for the intellectual property...

A previous docket had 58 leases.

https://cases.ra.kroll.com/99only/Home-DocketInfo

I think Dollar Tree is going to continue running these stores under this name and format... that hasn't been said anywhere, but I think that is what is going to happen...

[ClownLoach]

Docket 694- Dollar Tree purchases hundreds of leases and all intellectual property
This docket has 112 leases and all intellectual property.

The 112 leases in Docket 694- it says Dollar Tree agreed to purchase "shelving" in those stores for $1,724,767.

It appears they are paying $115,000 for the intellectual property...

A previous docket had 58 leases.

https://cases.ra.kroll.com/99only/Home-DocketInfo

I think Dollar Tree is going to continue running these stores under this name and format... that hasn't been said anywhere, but I think that is what is going to happen...

Checks out. I think their best chance is to do that instead of a long remodel based closure. Heck, they could hire the Pic N Save guy to run the new division...

[storewanderer]

Docket 694- Dollar Tree purchases hundreds of leases and all intellectual property
This docket has 112 leases and all intellectual property.

The 112 leases in Docket 694- it says Dollar Tree agreed to purchase "shelving" in those stores for $1,724,767.

It appears they are paying $115,000 for the intellectual property...

A previous docket had 58 leases.

https://cases.ra.kroll.com/99only/Home-DocketInfo

I think Dollar Tree is going to continue running these stores under this name and format... that hasn't been said anywhere, but I think that is what is going to happen...

Checks out. I think their best chance is to do that instead of a long remodel based closure. Heck, they could hire the Pic N Save guy to run the new division...

It might be a bit strange especially as they aren't getting much in markets like Sacramento which had an odd amount of real estate owned by 99 Only... but it appears to me they probably could make this work. Dollar Tree has been quite weak on food and I am wondering also if this could be a way for them to get better at that category.

Other possibility is they continue the 99 Only format in SoCal only, which does seem to be where they took over the highest concentration of real estate, and convert the stuff elsewhere to Dollar Tree..

Keeping in mind the Dollar Tree CEO has extensive experience in CA through Safeway and Longs...

[Alpha8472]

Would a 99 Cent Only Stores run by Dollar Tree be an improvement?

[storewanderer]

Would a 99 Cent Only Stores run by Dollar Tree be an improvement?

I'd rather give them a chance at running it than see it go away completely...

Since they have the intellectual property... it is either they run this format/banner or it goes away entirely...

Maybe if they ran it as a separate division it could work.

[HoustonRetail]

Would a 99 Cent Only Stores run by Dollar Tree be an improvement?

Here's what I'm thinking: Dollar Tree doesn't have any plans to " operate 99 Cents Only" beyond keeping stores open in a transition period while they remodel, like Aldi/Winn-Dixie. I have my doubts these stores will offer produce, and any of the 99 Cents branded items they used to carry during the transitionary period.

At this point I think we'll just have to wait and see how serious Dollar Tree is about this.