Christopher Wells, the chief restructuring officer for 99 Cents Only Stores, laid out a litany of recent issues facing the Tustin-based discount retailer in court documents last week, pertaining to its Chapter 11 bankruptcy filing and planned liquidation.
The company “has weathered adverse industry trends, increased competition, the COVID-19 pandemic, escalating theft and crime, record-high inflation and resulting increases in operating costs, including increases to the cost of labor associated with significant increases in the minimum wage,” particularly in California, he said.
How bad has inflation been for the company’s brand? Enough to warrant a name change, he suggested.
The percentage of merchandise priced at 99.99 cents or less at its stores—“the vast majority of which are named “99¢ Only Stores,” he said—fell from nearly 65% in 2020 to 57% in 2021, 52% in 2022, and below 50% in 2023.
As a result, the company has made efforts to rebrand in recent years, Wells noted in court filings, by renaming several dozen of its “refreshed” stores simply as “The 99 Store.”
Wells has some local experience and has seen success with a name change as part of a corporate restructuring. He previously served as Interim CFO of Real Mex during that Cypress-based restaurant operator’s prior Chapter 11 proceedings; the restructured and expanding company now operates under the Xperience Restaurant Group name after being sold in 2018.
For more on 99 Cents and its expansive local retail footprint, see Emily Santiago-Molina’s front-page story.
The headquarters of 99 Cents Only Stores appeared largely empty during a visit to the Flight office campus in Tustin last week. The retailer’s expected liquation could require some more creative re-leasing plans for OC’s most visible creative office project, one that’s seen the crash of a few other large tenants since its opening about five years ago.
E-commerce marketing company Branded Online was among the campus’ first big tenants.
Following a name change to Nogin, and a poorly received public listing in 2022 (via a SPAC deal), the company filed for bankruptcy at the end of 2023. It moved its HQ designation to NY around the same time, and now expects to be sold to a unit of new Mobix Labs partner B. Riley Financial; see this page for more on the Irvine semiconductor firm’s latest fundraising plans.
Fintech Happy Money was another early tenant at Flight, taking a full building, but quickly scaled back its presence amid the pandemic, putting its space up for sublease. The company is now based in Hawthorne, and this month it disclosed plans to lay off nearly 90 from that location.
Ed Lee, the Business Journal’s Restaurateur of the Year for 2023, has another venture in the works.
The Wahoo’s Fish Taco co-founder, and head of the Toast restaurants in Newport Beach and Tustin, plans a spot at the new Pretend City facility at the Great Park, city filings indicate. His partners include Carl Tong and Linda Nguyen.
See Yuika Yoshida’s stories on pages 1 and 67 for more on the expansion plans for OC Music & Dance and Pretend City.
