CITY OF COMMERCE, CA-Despite posting the biggest loss in the company’s history, 99 Cents Only Stores will continue to open new locations, though at a slower rate than originally planned, executives said at its second quarter conference call.

Originally, the chain planned to increase its stores by 15%. That has been reduced to 10% growth. Yet the store count could be as much as 50% larger by the time it returns to industry standard profitability levels.

“The stores we’re opening are more efficient,” said Eric Schiffer, CEO. “They are not a distraction. We’re in the middle of a long-term turnaround.”

Delaying openings could result in the loss of locations that might not be available again for a decade, particularly in infill areas in major markets such as Los Angeles, said Robert Kautz, executive VP and CFO. The company has opened eight stores thus far this year, with the next opening scheduled for Nov. 17 in Tulare, CA,

Total sales for the quarter were $290.9 million, up 11.4%. Same-store sales increased 6.1%. But hit by rising commodity costs, the company a net loss of $5.2 million, compared to same quarter 2006 net loss of $5,000.

Among the planned strategies to return to profitability include adding new systems to control shrink and costs – and even a move that makes the chain’s name something of a misnomer. In early October, the company adjusted its pricing on some items to amounts other than $0.99, selling some items at $0.79. But what looks like a price cut actually will help the bottom line, as items that previously sold for two for $0.99 can be sold more profitably as a single item for $0.79, Schiffer explained.

99 Cents Only Stores operates 260 units in California, Texas, Arizona and Nevada, and a wholesale division, Bargain Wholesale.

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