99 Cents Only Is Closing Stores Now

Shouldn’t discounters thrive in this sick economy?

99 Cents Only sure isn’t. The deep discounter is exiting Texas, where it will close all of its 48 stores. The move leaves the City of Commerce, CA-based retailer with 230 units in California, Nevada and Arizona.

The move comes just days after 99 Cents’ management announced that it was raising its prices above its 99-cent promise. Newspapers had fun with headlines after they learned that the chain was actually only raising prices by less than a penny.

Executive say they were exiting Texas because those stores made less money than in other locales. What? Are our friends in the Lone Star State richer than everyone else?

We’re guessing that other discounters have a better foothold down there. Or do you get the sense that 99 Cents’ problems are bigger than that?

12 Responses to “99 Cents Only Is Closing Stores Now”

  1. 1 E September 19, 2008 at 8:50 am

    The challenge with the 99 cent store discounters is that their P/L margins, by the nature of their business, is shear, to say the least. Management has no $$$ wiggle room to wait a quarter or three to try and ride the storm out. Smart thinking — staunch the wound now before the bleeding escalates to a hemmorhage.

  2. 2 Robert September 19, 2008 at 8:51 am

    I’d give my .02, but that would bring it over a dollar.

  3. 3 JG September 19, 2008 at 3:03 pm

    You got it, Texas had to many penny ante stores to compete with. Dollartree kicked ’em…..

  4. 4 Texas Bubba September 20, 2008 at 12:13 pm

    Texas has more dollar stores than any other state. 99 went into many new developments in the suburbs in Texas (rather than sticking to the successful formula of going into 2nd generation space in the inner city). Texas consumers are very image conscious as they are all 2 generations from clapboard houses and tend to overcompensate in their image (which makes sense since Neiman Marcus started there). It’s part of their cultural identity to pretend to be wealthier than they are (part of the Texas big hair show).

  5. 5 Laura September 20, 2008 at 7:21 pm

    This will be hard to believe. However, just today I spoke with a Mgr at the 99 store re: closure. I was told that it’s been in the works much longer than that to close and leave Texas. The owners did not pull out sooner only because of the employees they kept the store open. Their margin here is 10% and in CA 90% in profits. To keep the stores they would have to take from CA to cover their greater losses here. The owners gave their employees the option of transfering to CA or Nevada at a 99 store or take the package of 1 – 2 mos pay and benefits. For example: CA store they have registers going on both sides of the store. As soon they stock a shelf it’s gone! In TX evidently it’s slower buying consumers and it’s not working for a profit at all. There you have it! I’m a shopper there and will miss the prices on the quality products when have such as: Back To Nature, Planters, Guerreros Tortillas, Kraft, Spic N Span, Easy Off spray, Palmolive, Liquid Paper, Ever ready batteries, Gift bags and tissue, quality gifts also, McCormick spices, and many others. Maybe the Dollar Tree stores will pick up on these products and others as well. I am one person sad to see them go. Thanks for reading this.

  6. 6 Brooke September 23, 2008 at 2:39 pm

    Texas Bubba…why do you sound so bitter? Shut up. You have no clue what you are talking about.

    Anyway, every time I enter either of the .99 stores in my North Dallas neighborhood there seems to be a store full of shoppers. I find it hard to believe that they could not make it work here. Sounds like a bigger problem to me.

  7. 7 Texas Bubba September 23, 2008 at 8:52 pm

    The Bigger Problem is they paid too much for the rent given what the sales volumes are for the store (about half of what California does). I’m only bitter because all my Exes live in Texas.

  8. 8 Texas Bubba September 24, 2008 at 1:29 pm

    I forgot the most important thing. Texas metropolitan/suburban housing is such a bargain compared to any other major metropolitan area that the residents do have more of their paychecks for disposable income, hence, they spend on more expensive items and are truly aspirational shoppers who are, and can afford to be, image conscious.

  9. 9 Texas Bubba September 24, 2008 at 1:33 pm

    I wonder if JG, above, is Jeff Gold, President of the 99 Cents Only Stores. Hhhmmmmmm…….

  10. 10 BEVERLY October 31, 2008 at 8:45 pm

    so sorry to hear .99 cent stores closing in texas. maybe we as consumers can start a petition to try to keep some open. they store I frequent always seem to have a pretty good crowd. I see many elderly people there buying their weekly fruits and veggies. the store will truely be missed.

  11. 11 MrPotter November 3, 2008 at 8:40 am

    99 cents stores only may sell their Texas stores to their original founder, Mr. Gold, as he has made an offer. That may be a good solution to get the drag off their books but to retain the original owner who knows how to buy for the store (a key factor) and how to run them.

  12. 12 Ray January 7, 2009 at 8:18 pm

    that’s a shame I was planning to open one, does anyone no if that are closing in NJ?

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