Discount retailer Ollie’s announced Friday that it’s acquiring 11 former 99 Cents Only stores.
Ollie’s said the U.S. Bankruptcy Court for the District of Delaware approved the company’s stalking horse bid for the 99 Cents stores for $14.6 million in cash on Thursday. 99 Cents Only announced it would liquidate on April 4 and less than a week later, the California-based company filed for Chapter 11.
All 11 of the acquired 99 Cents stores are in “key markets” in Texas, the company said. Three are owned properties and the rest are leased. Ollie’s said the store acquisitions are expected to close in early June.
“We are very excited to be announced as the winning bidder of these store locations,” Ollie’s CEO John Swygert said in a statement. “These stores are the right size, located in good trade areas, have attractive rents and leasing structures, and have been serving value-oriented customers for many years. Texas is a great market for us that has tremendous growth potential and continues to benefit from strong population growth.”
Pennsylvania-based Ollie’s said Friday it operated 516 stores in 30 states. The company said during a March earnings call that its latest analysis indicates the company has room to grow its store footprint to 1,300 locations, up from a prior goal of 1,050.
Regarding the new Texas locations, “we are focused on getting these stores up and running as quickly as possible, given the occupancy expenses we will begin incurring at closing,” Swygert said. “We are maintaining our target of 50 new stores, less two planned closures, for fiscal 2024 and are in the early stages of evaluating the impact on our new store opening cadence this year.”
Ollie’s net sales for fiscal year 2023 rose 15.1% to about $2.1 billion. Comparable store sales also rose 5.7% year over year from a decrease of 3%. Ollie’s reported its net income also rose to $181.4 million, up 76% from $102.8 million the prior year. At the time of its Chapter 11 filing, 99 Cents had 371 locations in California, Arizona, Nevada and Texas with its top 10 creditors owed nearly $35 million, according to court documents.
