Dollar Tree Will Close Nearly 400 Family Dollar Stores, Rebrand 200 Others

Roman Schwartz
March 8, 2019

Approximately 200 Family Dollar stores will be re-bannered to Dollar Tree, and we plan to close as many as 390 Family Dollar stores this year. Approximately 200 Family Dollar stores will be re-bannered to Dollar Tree.

Dollar Tree, based in Virginia, bought out Family Dollar in 2015 for about $9 billion.

Sioux Falls has three Dollar Tree locations. But Family Dollar has struggled, and Dollar Tree is under heavy pressure from an activist investor to sell or revitalize the ailing line. However, Dollar Tree's stock price has fallen while Family Dollar struggled after the deal. Visits to a Dollar Tree are not always made out of necessity.

Though Family Dollar has remodeled some stores and expanded its product range, same-store sales growth has been almost flat on average in the past two years, pushing down the parent company's shares seven per cent in the last 12 months.

Variety store chain Family Dollar could close up to 390 stores in fiscal 2019 unless it obtains material rent concessions from landlords on underperforming stores.

For the full year, Dollar Tree's total net sales increased 2.6% to $22.82 billion from $22.25 billion in the 53-week fiscal 2017. In addition, some locations will be renovated to include $1 Dollar Tree merchandise sections.

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"The underperformance at Family Dollar since the acquisition has persisted long enough", Smith said.

"We are confident we are taking the appropriate steps to reposition our Family Dollar brand", Dollar Tree CEO Gary Philbin stated in a news release. It also said it's open to again testing new prices at Dollar Tree, where all items are priced a dollar or less. At the time the two discount store chains had more than 13,000 stores.

The CEO said that the chains are attempting to navigate the changing retail landscape amid tariffs on imported goods.

It's not yet clear how many Family Dollar stores will close in Louisiana. "In many rural markets where you don't have a Walmart, their competitor Dollar General blows them away".

There are some signs that the Family Dollar business is improving: Same-store sales, an industry term referring to stores open at least one year, at Family Dollar rose 1.4 percent for the quarter, its strongest of the year.

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