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.
