According to The Street, when a retail chain liquidates, the impact extends far beyond the company itself, particularly on local economies. Many U.S. markets already have an oversupply of retail space, and the closure of well-known stores only exacerbates the issue.
For malls, the loss of anchor stores, which typically draw large crowds, often results in vacant spaces with no immediate replacement.
Similarly, strip malls lose a key traffic-driving element when national retailers like Tuesday Morning and Christmas Tree Shops shut their doors, affecting local businesses that depend on the foot traffic these chains generate.
Shoppers rarely make trips specifically to visit smaller stores like Auntie Annie’s or Mrs. Fields, but if they are already at the mall, they might make an impulse purchase.
This is why shopping center owners compete fiercely to secure stores like Marshalls, Ross Dress for Less, and other “treasure-hunt” retailers that drive repeat business. Losing a store like this can hurt surrounding businesses and trigger a chain reaction of closures.
One such casualty is 99 Cents Only, a value-based retailer known for its treasure-hunt shopping experience. The chain, which dates back to the 1960s, filed for Chapter 7 bankruptcy and is currently liquidating its assets.
At the time of its bankruptcy filing, 99 Cents Only had over 370 stores in four states, including two distribution centers in California and Texas. Despite its loyal following, the company couldn’t overcome the financial strain caused by the COVID-19 pandemic.
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However, there is some hope for the communities affected by the closures. Ollie’s Bargain Outlet, a discount chain with a strong fan base, won a bankruptcy auction for 11 of 99 Cents Only’s Texas locations.
This acquisition is a positive sign for those areas, as Ollie’s customers, known as the “Ollie’s Army,” are enthusiastic about new store openings and spread the word quickly.
Ollie’s operates 560 stores across 30 states and has aggressive expansion plans. CEO John Swygert has indicated that the company could more than double its footprint in the coming years.
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The acquisition of the 11 Texas stores will help Ollie’s continue its growth, and the company is focused on getting these locations up and running as quickly as possible.
While this acquisition offers a glimmer of hope for some, the future of the remaining 99 Cents Only stores remains uncertain.
With liquidation underway, the brand’s name and intellectual property are likely to be sold at a future auction, and there is a possibility that some locations could reopen under new ownership. However, for now, the fate of those stores and their communities is unclear.
