NEW YORK, April 8 (Reuters) - Budget retailer 99 Cents

Only filed for Chapter 11 bankruptcy protection in Delaware on

Sunday, saying that it intended to close all of its 371 stores

in the U.S. and sell off its real estate and remaining

inventory.

The company operates under the business names "99¢ Only

Stores" and "The 99 Store," with locations in California,

Arizona, Nevada, and Texas. It said that inflation had made its

business model unsustainable.

The company's interim CEO Mike Simoncic announced the

company's impending shutdown late last week, saying: "This was

an extremely difficult decision and is not the outcome we

expected or hoped to achieve."

99 Cents Only sells everyday household items, basic grocery

items, and seasonal and party merchandise, much of which was

priced at or below 99 cents. The company, headquartered in

Tustin, California, had over 10,800 part-time and full-time

employees at the time of its bankruptcy filing.

In Chapter 11, the company intends to sell off its remaining

inventory and real estate. It has lined up a bankruptcy loan

that will provide $35.5 million in new funding for the company.

The company plans to close 125 stores by April 30, and shut

down the remaining locations by May 31, according to court

documents filed on Monday in Wilmington, Delaware, bankruptcy

court.

99 Cents Only has hired Hilco Global to manage its

going-out-of-business sales and assist in its real estate

liquidation. The stores will offer up to 30% discounts on

remaining inventory and will honor existing gift cards and

merchandise credits until April 19, the company said.

99 Cents Only has over $1 billion in both assets and

liabilities, according to its Chapter 11 petition.