99¢ Only Stores® Announces It Will Continue to Operate in Texas and Cancels Plan to Exit Texas Market
Over 1,000 Texan jobs will be saved
Aug 5, 2009
CITY OF COMMERCE, Calif.--(BUSINESS WIRE)--99¢ Only Stores® (NYSE:NDN) (the “Company”) announced that its Board of Directors voted to rescind the Company’s September 2008 announced plan to exit the Texas market and will continue operations in Texas indefinitely.
The Company’s decision to rescind the plan to exit Texas allows for well over 1,000 Texans to remain employed at 99¢ Only Stores in Texas and its Katy, Texas distribution center.
Eric Schiffer, CEO of 99¢ Only Stores, said, “We are very pleased to announce to our over 999 devoted and hardworking Texas 99ers in Texas that 99¢ Only Stores will be staying in Texas. In these challenging economic times, it is wonderful that they can have peace of mind that they can provide for their families with career growth opportunities and benefits. Our entire team should continue to be proud that they are also making a significant impact in the community by providing everyday essentials, including perishable food items, at an extreme value when our customers need us the most. Unlike many other deep-discount retailers, 99¢ Only Stores offers a wide selection of food and grocery items including produce, deli, milk, eggs, frozen foods, baked goods, as well as gourmet and organic foods, which accounts for over 50% of our product offerings.”
The Company opened its first stores in Texas in 2003 and currently operates 33 stores in Texas, comprised of 18 stores in Houston, 9 stores in the Dallas-Fort Worth Metroplex, 4 stores in San Antonio and 1 store in Harlingen and Bryan, Texas. In September 2008, shortly after hurricane Ike and after years of unprofitable operations in Texas, the Company decided to close all of its 48 Texas stores and to cease operations in the state. In February 2009, the Company noted improvements in store sales and potential beneficial opportunities resulting from a recessionary economy and announced that instead of closing all Texas stores, it would close approximately 1/3 of its stores and that it would suspend exit plans for up to 6 months to re-evaluate its Texas operations.
Mr. Schiffer continued, “During the first quarter of fiscal 2010, our Texas same-store sales increased 23.6% versus last year, and we recently eliminated the costs and losses from 15 stores that were closed in Q4 fiscal 2009 and Q1 fiscal 2010. Our operations team has been very focused on executing improved merchandising practices, labor saving methods, and enhanced customer service. Additionally, the Company believes the distribution of a broader line of goods is helping to attract many new customers who need to save on their everyday household needs at these challenging times.
"We have developed a business plan for Texas and we currently expect to achieve a small positive contribution to earnings from our Texas operations starting in the first quarter of next year, and we believe that it no longer makes sense to incur the costs of exiting the Texas market. We intend to maintain sufficient management staff and support professionals in Texas to achieve and then increase profitability, and to oversee proper utilization and potential redeployment of our real estate assets there.”
Mr. Schiffer concluded, “We continue to experience solid traffic trends and remain well-positioned to capitalize on the current challenging economy by offering consumers remarkable savings on everyday household items. In the past, we have been able to grow our customer base in both good and bad economic times. We are focused on merchandising, store execution and maintaining a positive store experience in order to retain our newfound customers gained during this economic cycle.”
In a separate release earlier today, the Company also announced its quarterly earnings. Net income for the first quarter of fiscal 2010 for the entire Company (including Texas) increased to $9.5 million, or $0.14 per diluted share, compared to a net loss of $1.5 million, or ($0.02) per diluted share, for the first quarter of fiscal 2009.
Founded over 25 years ago, 99¢ Only Stores® operates 271 extreme value retail stores with 201 in California, 33 in Texas, 25 in Arizona and 12 in Nevada. The Company’s next store grand opening is Thursday August 6th in Modesto, California. 99¢ Only Stores® emphasizes quality name-brand consumables, priced at an excellent value, in convenient, attractively merchandised stores. Over half of the Company’s sales come from food and beverages, including produce, dairy, deli and frozen foods, along with organic and gourmet foods. The Company’s New York Stock Exchange symbol is NDN.
Note to Editors: 99¢ Only Stores® news releases and information available at www.99only.com.
For further information: 99¢ Only Stores Elsy Guardado, 323-881-5785