99-Cents-Only Stores: Company Profile Research Paper

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Updated: Mar 28th, 2024

Introduction

99-Cents-Only Stores are a famous consumer retail chain in the USA. Founded by David Gold in 1982, 99 cents deal in local brands general items such as house-wares, packed food, kitchen items, stationery, tools, utensils, toys, clothes, and pet care items, etc. the retail chain provides a huge platform of discounted goods that are seasonal and affordable. Apart from retail sales, 99 cents also sells wholesale goods to retailers, distributors, and exporters. 99-Cents are currently running more than 281 stores in Southern California and other states like Arizona, Nevada, and Texas Most of the stores are located in Southern California, where it started.

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As the name suggests, the famous retail chain provides a deep discount on the general consumables such that all products are nearly priced at 99 Cents. The marketing idea created by the retail chain in 1982 has become massively popular in advertisement. One frequently comes across items priced at 99, 199 or 999, etc. The figure has a double effect on first-time readers. It tells one that it is less than 100, and the consumer considers it better than anything at 100 or 110. Over the years the deep-discount retail and wholesale industry have become highly competitive. The company faces tough competition in retailing, wholesale, local brands market, and imported goods market. It also offers its brand goods for sale.

Financial Status

Financial Status
Figure 1. Financial Status

The 99-cents market strategy has been a massive success. 99 cents now has on average annual sales of over $1.2 billion. 99 Cents is listed as NDN in S&P 400 and S&P 1500 Super Comp, and NYSE. The chart shows the share-price trend:

Profitability
Profit Margin-0.23%
Operating Margin0.46%
Management Effectiveness
Return on Assets0.54%
Return on Equity-0.55%

The net income for 99cnets has dramatically decreased over the last 3 years. Although the sales revenues are reported to have increased, general and sale expenses due to rising inflation have caused the income to decrease.

PERIOD ENDING29-Mar-0831-Mar-0731-Mar-06
Total Revenue1,199,3741,104,6961,023,589
Cost of Revenue738,499672,101640,140
Gross Profit460,875432,595383,449
Net Income2,8939,76211,422
Total Assets649,410643,135628,708
Financial Strength
Quick Ratio (MRQ)1.14Current Ratio (MRQ)2.47LT Debt/Equity (MRQ)0
ExecutivesPay
Mr. Eric Schiffer , 48$ 120.00K
Chief Exec. Officer, Assistant Corp. Sec., Director and Chairman of the Exec. Committee
Mr. Jeff Gold, 41$ 120.00K
Pres, Chief Operating Officer
Mr. Robert Kautz, 51$ 400.00K
Chief Financial Officer, Principal Accounting Officer, and Exec. VP
Mr. Howard Gold, 49$ 120.00K
Exec. VP of Special Projects
Mr. David Gold, 76N/A
Founder and Chairman
Dollar amounts are as of 31-Dec-08 and compensation values are for the last fiscal year ending on that date. Source: Yahoo finance

All numbers in thousands. Source: Company’s Financial Statements

The retail chain has currently 11,700 employees. The table shows the names and salaries of top officials.

99 Cents manages its shipping and trucking system for inventory transportation and management.

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Competitors

99 Cents currently competes with giants like Wal Mart, BIG, Best Buy, and Arden Group. But the most similar and nearest market share competitor of 99c is Family Dollar Stores Inc. Family Dollar Stores’ market cap is currently $4.6 b, as compared to 99 cents’ $783m. They have 6,500 stores in 44 states, 25,000 employees, and a much wider range of products than 99 cents. Sales are very high ($6,983b in 2008) as compared to 99c. 99 cents is facing tough competition in many states in front of Family Dollar stores and others like Family Tree. Amid high inflation and tough competition, 99 cents were forced to raise prices on some items, for the first time, to 99.99cents.

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IvyPanda. (2024, March 28). 99-Cents-Only Stores: Company Profile. https://ivypanda.com/essays/99-cents-only-stores-company-profile/

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"99-Cents-Only Stores: Company Profile." IvyPanda, 28 Mar. 2024, ivypanda.com/essays/99-cents-only-stores-company-profile/.

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IvyPanda. (2024) '99-Cents-Only Stores: Company Profile'. 28 March.

References

IvyPanda. 2024. "99-Cents-Only Stores: Company Profile." March 28, 2024. https://ivypanda.com/essays/99-cents-only-stores-company-profile/.

1. IvyPanda. "99-Cents-Only Stores: Company Profile." March 28, 2024. https://ivypanda.com/essays/99-cents-only-stores-company-profile/.


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IvyPanda. "99-Cents-Only Stores: Company Profile." March 28, 2024. https://ivypanda.com/essays/99-cents-only-stores-company-profile/.

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