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No one likes to see a store go out of business even if they never shop at that retailer. Retail store closures can have a ripple effect, especially when the store is a destination.
If a major retailer closes its doors, nearby businesses will suffer. Maybe you go to Five Below or Ulta Beauty because you love shopping at those chains, but when you’re done, you grab a bite to eat at a locally owned business, or schedule a haircut or pedicure because you know you’ll be in the area.
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A closed retail store can wreak havoc on an entire shopping arcade, and in tough economic times where labor, rent and borrowing money have become more expensive, it doesn’t take much to push many businesses into failure.
That’s why it’s very bad news when destination chains like Christmas Tree Shops, Tuesday Morning, and Bed Bath and Beyond fail. People are not only losing a place to shop, they are losing a major business that drives people to the shopping plaza.
It’s not easy to fill those places with another business that brings in traffic. This is what makes it convenient when a growing chain acquires leases previously held by a failing company.
In this case, Dollar Tree would step in and take over the leases for a large number of locations for just 99 cents.
Image source&col; The Street
Communities will still have a discount retailer
When 99 Cents Only announced it would be closing and liquidating all of its nearly 400 locations in a web post on April 4, it was shocking news to many of its longtime customers. The retailer was more of a traditional dollar store, selling items such as fresh produce not generally associated with this type of discount store.
The chain went into liquidation almost immediately although it was always possible for a buyer to step in to purchase the brand.
“The Company has entered into an agreement with Hilco Global to, among other things, divest all Company-owned merchandise and dispose of certain fixtures, furnishings and equipment in the Company’s stores,” the post said. “Sales under this agreement are expected to begin on April 5, 2024, and will be implemented at all of the company’s 371 store locations.”
It appears that many of the company’s former locations will remain as discount retailers, though none of the current deals will keep the 99 Cents Only brand alive. Deal executor Ollie (first) It reached a deal on May 24 to acquire leases for just 11 99 Cent stores in Texas while about half of the chain’s leases in bankruptcy were purchased by Dollar Tree.
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Dollar Tree takes over 170 stores for just 99 cents
While Dollar Tree (DLTR) It may not be as beloved as 99-cent-only, but its move means the chain’s customers in many markets will still have the option to shop at a discount.
“Dollar Tree acquired the assignment rights for 170 leases for 99-cent-only stores throughout Arizona, California, Nevada and Texas. The deal was completed through two transactions in May that were approved by the U.S. Bankruptcy Court for the District of Delaware. As part of the transactions, it acquired Dollar Tree also acquires North American intellectual property for the 99 Cents Only stores and select furniture, fixtures and equipment on site.
The new owner of the 99 Cents Only name does not appear to be keeping it, though he has not ruled it out.
“As we continue to execute our accelerated growth strategy for the Dollar Tree brand, this was an attractive opportunity to secure leases in priority markets where we see strong profitable growth potential. The portfolio complements our existing footprint and will provide us with access to high-quality real estate assets in retail centers.” premium retail, enabling us to rapidly grow the Dollar Tree brand throughout the western United States, reaching more customers and communities.
Dollar Tree expects to reopen its newly acquired locations by the fall.
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