99 Cents Only Stores: 371-Store Liquidation and Wind-Down

Number Holdings, Inc., the parent of 99 Cents Only Stores, filed chapter 11 on April 7, 2024 in the U.S. Bankruptcy Court for the District of Delaware. The filing followed an April 5 announcement to close all 371 stores and begin liquidation sales across California, Arizona, Nevada, and Texas.

Bloomberg reported the debtors listed assets of $1 billion to $10 billion and liabilities in the same range in their petitions. The company said it secured a $60.8 million DIP facility with $35.5 million of new money to fund a wind-down and asset sales. A Delaware bankruptcy judge confirmed the liquidating plan on January 24, 2025, and the claims agent case page lists January 31, 2025 as the effective date.

Debtor(s)	Number Holdings, Inc. and affiliated debtors (99 Cents Only Stores)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-10721
Judge	Hon. J. Kate Stickles
Petition Date	April 7, 2024
Confirmation Date	January 24, 2025
Effective Date	January 31, 2025
Stores	371 across California, Texas, Arizona, and Nevada
Employees	Approximately 10,874
Estimated Assets	$1 billion to $10 billion
Estimated Liabilities	$1 billion to $10 billion
Funded Debt	Approximately $456.9 million (prepetition)
DIP Facility	$60.8 million total ($35.5 million new money; $25.3 million FILO roll-up)

Chapter 11 Wind-Down and Liquidation Strategy

Filing posture and objectives. The debtors entered chapter 11 to execute a going-out-of-business strategy and monetize assets through inventory liquidation, lease sales, and real estate dispositions. The company said the filing was designed to facilitate a wind-down and a value-maximizing sale of real estate and other assets while store closing sales continued across the chain. The press release announcing the filing emphasized store closing sales at all locations and a targeted process to sell leases and owned properties. Bloomberg and NPR reported that liquidation sales began across the entire fleet as the company pursued a full shutdown rather than a reorganization. Bloomberg described going-out-of-business sales beginning at all stores, and NPR noted the immediate start of liquidation sales following the closure announcement.

Debtor-in-possession financing. The debtors obtained a DIP package sized to fund a liquidation process rather than a long operating turnaround. The company stated that the facility totaled about $60.8 million, including $35.5 million in new-money term loans. Bankruptcy filings describe the facility as a multi-draw term loan with a $25.3 million roll-up of prepetition FILO debt, priced at SOFR plus 7.50% with a 1.00% SOFR floor and a 2.00% commitment fee and 2.00% exit fee. The initial draw was $20.5 million at the interim order, with a $15.0 million final draw after final approval. Court filings also describe a minimum cash balance covenant of $15 million through May 31, 2024 and $10 million thereafter, with a rolling 13-week budget updated biweekly.

Bidding procedures and auction calendar. Court filings set a structured sale calendar tied to the DIP milestones. The bid procedures motion established late-April deadlines for indications of interest and objections, followed by a mid-May bid deadline and a late-May auction and sale hearing. These deadlines framed the lease and asset sales that later transferred large blocks of stores to other discount retailers.

Major asset and lease transactions. The most visible outcomes were the transfers of store leases and selected assets to other retailers. Dollar Tree announced it had acquired designation rights for 170 leases across Arizona, California, Nevada, and Texas, along with the North American intellectual property for 99 Cents Only Stores and certain fixtures and equipment. CNN reported that the company planned to rebrand and reopen the sites as Dollar Tree stores. In a separate transaction, Ollie's Bargain Outlet and its affiliate OBO Ventures won approval for a $14.6 million purchase of 11 Texas locations, an acquisition that Retail Dive described as a stalking horse sale approved by the court. Bankruptcy orders for the Ollie's transaction included findings that the sale was in good faith and free and clear of liens under section 363(f).

Plan confirmation and creditor treatment. The debtors filed a joint chapter 11 plan and disclosure statement on November 27, 2024. The plan was confirmed on January 24, 2025 and became effective on January 31, 2025, as reflected in the notice of effective date filed in the case and on the claims agent case site. Court filings show the plan is liquidating in nature and provides for a liquidating trust, with META Advisors LLC named as liquidating trustee. The confirmation order also approved debtor releases, consensual third-party releases, and exculpation provisions that exclude fraud, gross negligence, or willful misconduct.

Claims administration and bar dates. Kroll Restructuring Administration LLC was appointed claims and noticing agent, and the company's case site has served as the public portal for notices and claim filings. The notice of effective date set March 3, 2025 as the deadline for most administrative claims that accrued from June 1, 2024 through the effective date, excluding fee claims and certain settlement-related fees. The same notice provides that executory contracts and unexpired leases not assumed or rejected before confirmation were deemed rejected as of the effective date.

Lease rejection and assumption framework. The liquidation required a fast process to assume and assign valuable leases while rejecting the remainder. Court orders in the case approved streamlined procedures for rejecting leases and executory contracts and for assuming and assigning selected leases to buyers. That framework supported the bulk transfer of lease rights to purchasers like Dollar Tree and Ollie's while allowing the debtors to reject nonperforming locations on an expedited schedule, a common dynamic in retail liquidations where real estate value is the primary asset class.

Business Overview and Footprint

Core business and formats. 99 Cents Only Stores operated as an extreme value retailer with a core proposition built around fixed or sub-dollar price points, supported by a mix of consumables, seasonal items, and general merchandise. Bankruptcy filings describe the chain as operating under the 99 Cents Only Stores and The 99 Store brands and maintaining a Bargain Wholesale division that supplied third-party retail customers. The company reported an average store size of about 20,000 square feet and five distribution centers that served the store network.

Store footprint. Court filings list 371 stores spread across four states, with the largest concentration in California. The store base and distribution network were concentrated in the western U.S., making the company more exposed to West Coast labor and occupancy costs than most national dollar store peers.

Founding and growth. The chain traces its origins to a single store opened on August 13, 1982 in Inglewood, California. It became a distinctive regional brand by using a fixed price point and emphasizing value in a mix of grocery, household, and seasonal categories. The company later went public in 1996 and remained a well-known Southern California retailer for decades. Fortune described the closure decision as ending a 42-year run for the brand.

Brand positioning. The chain's identity was closely tied to its 99-cent price point and a treasure-hunt assortment that mixed staples with opportunistic closeouts. Wikipedia describes the company as a fixed-price retailer that grew into a regional staple, particularly in Southern California, where the brand name itself became shorthand for extreme-value shopping. That positioning made pricing changes more visible to customers, and the shift away from sub-$1 items in later years disrupted a core element of the brand promise.

Ownership History and Prepetition Capital Structure

2012 take-private transaction. 99 Cents Only Stores was acquired in 2012 by Ares Management and the Canada Pension Plan Investment Board at $22.00 per share, valuing the equity at approximately $1.6 billion. The transaction ended the company's public listing and left the Gold/Schiffer family with a significant minority stake, while founder David Gold continued as chairman emeritus. The capital structure at filing reflected years of leveraged ownership and a retail model increasingly constrained by inflation and margin pressures.

Funded debt at the petition date. Bankruptcy filings list about $456.9 million of funded debt, split across secured asset-based lending, FILO debt, and $350 million of senior notes. The funded debt profile was large relative to the liquidation value of an inventory-heavy, lease-based retailer, especially once store closures were announced. The combination of secured borrowing and senior notes limited flexibility in a liquidation and drove the need for a tightly controlled DIP budget.

Collateral structure. Court filings describe a split-lien structure in which the ABL lenders held first-priority liens on current assets and second-priority liens on certain fixed assets and equity interests. The senior notes held the inverse priority, with first liens on notes-priority collateral and second liens on ABL-priority collateral. This structure shaped the DIP negotiations and the eventual liquidation waterfall, particularly as inventory and lease proceeds were monetized.

Drivers of Distress and Liquidity Deterioration

Macro and industry pressures. Management attributed the company's decline to a combination of operating and macro factors. Bloomberg reported that the company cited adverse industry trends, increased competition, COVID-19 impacts, escalating theft, and record inflation. The interim chief executive said the company had been pressured by pandemic effects, changes in consumer demand, inflation, and rising shrink. These pressures hit a model that historically relied on a clear 99-cent price point, a high volume of low-priced consumables, and rapid inventory turns.

Pricing model breakdown. Bankruptcy filings state that sub-$1 items fell below 50% of the product assortment by 2023, undermining the brand's core value proposition. The company faced resistance to price increases, leaving little room to offset inflation in freight, labor, and product costs. When a fixed price promise becomes difficult to sustain, the margin compression can be immediate, particularly in categories like grocery and consumables where price elasticity is high.

Cost structure and labor pressures. Court filings cite California minimum wage increases as a material driver of higher labor costs. With 265 of 371 stores in California, the chain's wage exposure was higher than peers with broader geographic footprints. At the same time, retail theft and shrink rose, reducing gross profit and forcing a higher level of loss prevention expense relative to revenue.

Transformation efforts and liquidity stress. Bankruptcy filings describe a 2023 transformation plan that included store upgrades, leadership changes, real estate streamlining, and workforce reductions. The plan did not restore liquidity, and by early 2024 the debtors faced vendor cash-on-delivery demands and landlord pay-or-quit notices. The board decided on April 4, 2024 to close all stores and pursue a DIP-backed wind-down. Fortune reported that S&P Global had expected the company to remain cash-flow negative for an extended period.

Industry context for extreme value retail. A Marketplace analysis of the discount sector described how inflation and higher wholesale costs put fixed-price models under pressure, forcing retailers to choose between raising prices or absorbing margin erosion. The report framed discount retail as an industry where small changes in unit economics can produce large cash flow swings, particularly for chains that depend on high-volume, low-margin sales and operate with heavy rent and labor costs. Those conditions align with court filings that show 99 Cents Only Stores shifting away from sub-$1 pricing while still carrying a California-heavy footprint. The chain's liquidation thus fits into a broader pattern of discount retailers trying to rebalance pricing and cost structures during a period of persistent inflation and elevated shrink. Marketplace characterized these pressures as widespread in the sector.

Real Estate, Inventory, and Store Closure Execution

Real estate portfolio marketing. The liquidation strategy centered on monetizing a large lease and property portfolio. The company announced marketing of 377 real estate assets consisting of 333 leased locations and 44 owned properties. CoStar reported that the company began marketing leases for bankruptcy sale, highlighting the importance of the lease portfolio to the liquidation outcome. The process used Hilco Real Estate in collaboration with Jefferies to market the properties.

Inventory and real estate proceeds. Hilco Global's case study reported $245 million of retail inventory monetized and $168.5 million of real estate proceeds from 44 owned properties, with more than 200 leases sold within 75 days. Those figures, if realized across the portfolio, indicated substantial liquidity relative to the company's size and supported the liquidating plan's structure.

Dollar Tree designation rights. Dollar Tree completed a transaction for designation rights to 170 leases, along with the North American intellectual property and select fixtures and equipment. CNN reported the company planned to rebrand and reopen many of the sites as Dollar Tree locations, creating one of the largest single-buyer lease transfers in a recent retail liquidation.

Ollie's Texas acquisition. Ollie's Bargain Outlet announced it was the winning bidder in the bankruptcy auction for 11 Texas locations at a $14.6 million purchase price. Retail Dive noted that the transaction involved a mix of three owned properties and eight leased sites, and that the court approved the deal as part of the liquidation process.

Texas footprint changes. Local coverage in Texas reported that Dollar Tree paid more than $1.3 million to assume leases and that Dollar Tree and Ollie's together would control 18 former 99 Cents Only locations in the state. The regional concentration of the assets highlights how lease and real estate values were monetized market by market rather than through a single buyer for the full chain.

Advisors and Case Administration

Professional advisors. The filing announcement listed a standard retail liquidation advisory stack. The debtors named Milbank LLP as legal counsel, Jefferies LLC as investment banker, and Alvarez & Marsal as restructuring advisor. The same announcement identified Hilco Global as liquidation support, while the real estate marketing process was run by Hilco Real Estate in collaboration with Jefferies. This structure reflects the operational intensity of a full-chain liquidation, where inventory disposition, lease transfers, and real estate sales need to proceed on parallel tracks.

CRO and liquidation execution. Hilco Global's case study reports that Chris Wells of Alvarez & Marsal was appointed chief restructuring officer and that Hilco monetized inventory and real estate proceeds during the wind-down. The CRO role is typical in large retail liquidations, providing centralized oversight of store-closing operations, vendor negotiations, and the implementation of the DIP budget and sale milestones.

Claims administration. Kroll Restructuring Administration LLC was appointed as claims and noticing agent and maintains the case site at cases.ra.kroll.com/99only. The claims agent handles notice distribution, claims intake, and the official claims register, which is essential for a case involving tens of thousands of potential claimants and lease counterparties.

Key Case Timeline

The case moved quickly from a public closure announcement to a court-supervised liquidation, with key milestones compressed into the first eight months. The timeline below combines public announcements, court milestones, and sale transactions to show how the wind-down progressed from April 2024 through the plan effective date.

The liquidation milestones show how rapidly the company moved from announcement to asset sales. The most complex work occurred in April and May 2024, when the debtors obtained DIP financing, launched the auction process, and executed the two most material lease transactions. The plan confirmation timeline in late 2024 and early 2025 reflects the time required to reconcile claims, document the liquidating trust, and finalize distributions after the core asset sales were complete.

Workforce and Stakeholder Impact

Employee impact. Bankruptcy filings list approximately 10,874 employees at the petition date, while Fortune reported that about 14,000 workers were expected to lose jobs as the stores closed. The difference likely reflects seasonal or part-time headcount and the timing of the measurement, but both figures point to a large workforce affected by the liquidation.

Liquidation cadence and store-level execution. Liquidation sales began on April 5, 2024, the same day the closure decision was announced, and continued through early June as the fleet closed. NPR reported the immediate start of liquidation sales, while Hilco Global later reported $245 million of inventory monetized during the wind-down. That result implies a rapid sell-through campaign that required coordinated markdowns, merchandise transfers, and store-level staffing as locations closed on a rolling basis.

Community footprint. The chain's footprint was concentrated in the western U.S., with heavy exposure to California and Texas. NPR noted that stores were spread across California, Arizona, Nevada, and Texas, and liquidation sales began immediately after the April 5 announcement. Wikipedia reports that all stores closed between April 5 and June 3, 2024, compressing the shutdown into a roughly two-month window.

Stakeholder dynamics. The plan structure shows how a liquidation case channels value to creditor classes rather than equity. Court filings indicate that secured claims and priority claims were left unimpaired, while senior notes and general unsecured claims were impaired but voting in favor. Equity interests were impaired and deemed to reject. The plan's liquidating trust structure suggests that proceeds from inventory, lease transfers, and real estate sales will be distributed as claims are reconciled over time.

Frequently Asked Questions

What is 99 Cents Only Stores and where did it operate'

99 Cents Only Stores was an extreme value retailer founded in Inglewood, California, with its first store opening in 1982. At the time of its chapter 11 filing, the chain operated 371 stores across California, Arizona, Nevada, and Texas.

When did the company file chapter 11 and where'

Number Holdings, Inc. and affiliated debtors filed chapter 11 on April 7, 2024 in the U.S. Bankruptcy Court for the District of Delaware.

Why did 99 Cents Only Stores decide to liquidate'

Management cited a mix of pressures including inflation, competition, theft, and pandemic impacts, while the interim CEO pointed to inflation, changing consumer demand, and rising shrink. Court filings also cite California wage increases, vendor COD demands, and landlord pay-or-quit notices as factors in the decision to close all stores.

How much debt did the company report at filing'

Court filings list approximately $456.9 million of funded debt, including $350 million of senior notes, $38.2 million in ABL borrowings, $25 million of FILO debt, $25.7 million in letters of credit, and an $18 million PropCo promissory note.

What DIP financing did the debtors obtain'

The company announced a $60.8 million DIP facility with $35.5 million of new money. Court filings describe a multi-draw term loan with a $25.3 million FILO roll-up, priced at SOFR plus 7.50% with a 1.00% floor.

What did Dollar Tree and Ollie's acquire'

Dollar Tree completed a transaction for designation rights to 170 leases, along with the North American intellectual property and select fixtures and equipment. Ollie's Bargain Outlet announced a purchase of 11 Texas locations for $14.6 million.

When was the plan confirmed and when did it become effective'

A Delaware judge confirmed the plan on January 24, 2025, and the claims agent case page lists January 31, 2025 as the effective date.

What is the liquidating trust'

Court filings show the plan created a liquidating trust to administer remaining assets and distributions, with META Advisors LLC serving as liquidating trustee.

Who is the claims agent for 99 Cents Only Stores'

Kroll Restructuring Administration LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For more bankruptcy case analyses and restructuring insights, visit ElevenFlo's bankruptcy blog.