Their whole profile or business model is completely done. This story is very interesting. 99 cent stores aren’t closing a handful of locations. They’re shutting down all operations. They’re closing every store in the country. It’s a big deal. Where are people going to go for the lowest cost? Of course they’re going to continue to shop at some of these stores, go to Walmart, but these stores can’t even survive with the inflation that is picking up around the country.

And the thing is, we have seen a little bit of a lull, but inflation is going to get worse. Now, many would say that this is only 371 stores, but remember, it’s an entire corporation. It’s an entire group of people being laid off. It’s an entire shareholder base being wiped out. This story is out of Yahoo says that 99 cent stores are going to close all 371 stores and wind down its business.

It says as they close all 371 of its stores and wind down its business operations after more than four decades, the city of Commerce discount chain announced Thursday. This is a very this is an extremely difficult decision and is not the outcome we expected or hope to achieve, interim chief executive Mike Semionic said in a statement. Unfortunately, the last several years have presented significant and lasting challenges in the retail environment.

He cited multiple factors, including the unprecedented impact of COVID-19, shifting consumer demand, persisting inflation and pressures, and rising levels of shrink, an industry term that refers to loss of inventory attributed to reasons such as shoplifting, employee theft and administrative errors. Combined, those issues have greatly hindered the company’s ability to operate. 99 Cent stores has stores in California, Arizona, Nevada and Texas and has about 14,000 employees. The privately held company said it has reached an agreement with Hilco Global to liquidate all of its merchandise and dispose of fixtures, furnishings and equipment and its stores.

Sales are expected to begin Friday. Hilco Real Estate is managing the sale of the company’s real estate assets, which are owned or leased, it says. The announcement by 99 cent only reflects a larger weakness in the dollar store category, said Brad Thomas, equity research analyst at KeyBank Capital Markets Dollar Tree, a Chesapeake, Virginia based retailer, announced last month that it was closing 600 of its family dollar stores this year and an additional 370 in the next few years.

He noted. It’s been trying times for many, many retailers, he said. What’s interesting is that it started out as a boon to retailers in the pandemic with all those stimulus checks quickly turned into a very troublesome time, rising wages. We’ve talked about how the government just keeps forcing that right. Inflation and higher losses due to shrinkage have reduced profits for retailers in a deep discount sector where margins are already extremely low.

99 cent only with its large base in California stores has been under particular wage pressure, he said. And it’s a disadvantage compared with larger chains such as market leader dollar general, which has a store count of close to 20,000, a sales base and a store base that is multiple times larger than $0. 99. Last week, Bloomberg reported that $0. 99 only was considering a bankruptcy filing as it contended with a liquidity shortfall.

Now that’s an interesting point I have to make when this moment comes and retailers are looking at bankruptcy and then instantly, you know what? We’re going to close. It’s because as they really dive in, auditors come in, third party auditors come in and they start looking at this, they start to advise them and say, you know what? You were looking at bankruptcy, but it’s going to cost you more to keep this thing open.

And it’s interesting because in real estate we see that as well, where we’re seeing commercial real estate start to fall, they’re having a hard time, they’re going into bankruptcy. And then there’s companies that just go, you know what? The heck with this. We’re, I mean, they go, we’re just going to shut down. We’re going to give back the property and close operations. Because even with bankruptcy, there’s still, the customers aren’t coming into the dollar, the 99 cent stores, right.

They’re not coming in or the margins are too tight. We, yeah, sure, we can, depending on how much debt we have, we could restructure that. But at what cost? And do we have business coming in? Same thing with real estate. They’re like, we could bank, go bankrupt and restructure our debt, but there’s nobody renting our properties. And that’s, that’s the telling sign here. This economy is nowhere near bottoming and it is going to get worse.

And the, really, the reason why you know that is because the general public doesn’t know it. But you do. So just keep getting ready. Keep vigilant. Opportunities are going to abound everywhere around you. Just you watch. That being said, the economic ninja is out. .

See more of The Economic Ninja on their Public Channel and the MPN The Economic Ninja channel.