COMMERCE, Calif. — 99 Cents Only Stores here said Thursday it plans to supplement its private-label consumables offerings with new items sourced overseas as part of an effort to improve gross margins.


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According to Stephane Gonthier, president and chief executive officer, the chain will begin introducing "a flurry of new private-label consumables" at the beginning of the calendar year, "and we will ramp up over the next two or three quarters, so the impact will be significant over time."

Gross margins declined during the second quarter "as consumers favored more low-margin items," Gonthier noted during a conference call with analysts.

Read more: 99 Cents Only Q2 EBITDA Down, Sales Up

He said 99 Cents Only Stores is scheduled to open a new cold warehouse here in mid-December that will also enhance gross margins as well as boost distribution and labor productivity.

Gonthier, who joined 99 Cents Only in August, said he sees opportunities for the company to grow within its existing marketing areas, primarily California and Texas. He also said the company is working "to become best-in-class in sales performance margin enhancement and expense management."

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