99 Cents Only Stores:
Destroyed by Wall Street

Apr 22, 2024

In early April, 99 Cents Only Stores announced that it was closing all its 371 stores in California, Nevada, Arizona, and Texas.

More than 10,000 workers are losing their jobs. And many working-class neighborhoods across the Southwestern U.S. are losing a store where families could buy everyday necessities at more affordable prices. In many cases the only store, especially since other discount chains have also been closing stores lately—hundreds of Dollar Tree and Family Dollar stores, for example, whose impending shutdown was announced in March.

99 Cents Only is not going out of business because customers abandoned it. To the contrary, the discount chain’s stores have continued to be busy. The reason behind the shuttering of this retail chain is that it was under a crushing debt as a result of being taken over by Wall Street vultures.

In 2012, the owners of 99 Cents Only sold it to Ares Management, a private equity firm, for 1.6 billion dollars. This change in ownership turned the company into a “highly leveraged capital structure,” according to a report by Standard & Poor Rating Services. That, in plain English, is to say that the new owners of 99 Cent Only Stores used it as leverage to borrow big sums of money, saddling the company with a big debt, as private equity firms usually do. Then, private equity owners continue to borrow big, further ballooning the company’s debt, to pay themselves huge sums. Sure enough, in its bankruptcy filing, 99 Cent Only Stores reported 457 million dollars of debt in loans and lines of credit.

This rotten scheme is nothing new—it’s what was behind the bankruptcy of quite a few other big, well-known chain stores across the U.S. in recent years, such as Sears, Kmart, and JCPenney, to name a few.

In their zeal to take the money and run, these Wall Street parasites are in fact cannibalizing entire sectors of the capitalist economy.