Can Pic ‘N’ Save the 99 Cents Only Stores?

99 cent stores close

In a poignant twist of fate, the iconic 99 Cents Only Stores, faces its sunset. Emerging from the vibrant atmosphere of Grand Central Market, the chain, headquartered in Commerce, made the somber announcement on April 4th, 2024, announced that it would permanently close all of its stores, signaling the end of its 42-year journey.

Conversations with employees at the Maple and Washington branch in Downtown Los Angeles, lamented a surge in theft and a dwindling assortment of items truly priced at 99 cents.

The narrative of 99 Cents Only Stores traces back to its visionary founder, David Gold, who inherited a liquor store at Grand Central Market, where he ran a test by selling bottles of wine priced at of 99 cents. When he put a 99 cent sign on anything, it was gone in no time, and realized it was a magic number. Gold’s commitment to providing quality goods at unbeatable prices propelled the chain’s meteoric ascent.

From its modest origins on La Tijera Boulevard in 1982 to its expansion across multiple states, the brand amassed a devoted following, memorable marketing strategies and astute pricing tactics. This moment marks the culmination of an era during which the retailer supplied affordable merchandise to communities across California, Arizona, Nevada, and Texas. Predominantly situated in urban areas and underserved neighborhoods, these stores served as vital lifelines, filling gaps left by conventional grocery outlets.

In the lead-up to the 1984 Olympic Games in Los Angeles, the retailer seized an extraordinary opportunity by acquiring 500,000 authentic Olympic souvenir hats at an astonishing price of 37 cents each. Leveraging this bargain, the hats were prominently priced at 99 cents apiece, a stark contrast to the $8 listings elsewhere. The response was immediate and overwhelming, with 99 Cents Only stores engulfed with eager customers.

Advertisements adorned with witty, one cleverly wished television personality Joan Rivers a tongue-in-cheek “Happy 99th Facelift,” while another playfully commended the Dodgers on “Losing 99 Games.” This ingenuity extended to store operations as well, with the stores adopting the ambitious schedule of being open from 9 a.m. to 9 p.m., “nine days a week.” The company also celebrated the 99th birthday of public figures and named 99-year-old individuals as honorary spokespersons.

The company’s growth soared to 289 stores across the Southwest by the time it agreed to be acquired in 2011 by Los Angeles private equity firm Ares Management and the Canada Pension Plan Investment Board.

However, the subsequent deal, valued at $1.6 billion, burdened the company with a significant debt load, transforming its financial structure. Facing staggering operating losses, the privately held company, with a workforce of 10,874 employees, encountered severe challenges in recent years.

Chief Restructuring Officer Christopher J. Wells acknowledged the necessity of transferring some financial burdens to customers through price increases, a move met with resistance and declining customer traffic. Wells underscored the severity of these challenges in his bankruptcy declaration on April 7, 2024, revealing a decline in merchandise priced at “99.99 cents or less” from nearly 65% in 2020 to below 50% by 2023.

Additionally, reported debts to major unsecured creditors and substantial loans and lines of credit paint a bleak financial picture. Company executives and industry analysts attributed the company’s struggles to escalating theft, heightened competition, the disruptive impact of the COVID-19 pandemic, inflation-driven operating costs, and the burden of servicing debt.

Despite these tribulations, a ray of hope emerges, Mark Miller, CEO of the rebooted Pic ‘N’ Save brand, and former president of Big Lots, announced on April 7th, 2024, aims to acquire 143 defunct stores across Southern California, envisioning their revitalization alongside former 99 Cents Only executives.

Miller, spearheads an effort to salvage the remaining 99 Cents Only Stores, close them for 90 days after final sales, and then reopen in the original “Treasure Hunt” style. Miller’s deep ties to the discount retail sector and commitment to community service underpin his endeavor to preserve these stores’ significance in Southern California communities.

As downtown awaits the outcome of this endeavor, the potential revival of these stores serves as a testament to resilience and community spirit.

Author: Shawn Smith

A Cancer Sun, Leo Rising, and a Pisces Moon, Shawn Smith is a multi-media artist with a background in real estate and a champion of The Run. Shawn has been a resident of downtown Los Angeles since 1990.