Dollar Tree announced it has acquired designation rights for 170 99 Cents Only store leases in Arizona, California, Nevada and Texas.
Through a statement, Dollar Tree reported that the agreement was completed through two transactions in May that were approved by the United States Bankruptcy Court for the District of Delaware.
As part of the transactions, Dollar Tree also acquired the North American intellectual property of the 99 Cents Only stores and select furniture, fixtures and equipment at the location.
The company anticipates that 99 Cents Only stores in Arizona, California, Nevada and Texas can open their doors as new Dollar Tree locations in fall 2024.
The bankruptcy of 99 Cents Only Stores
In April, California-based 99 Cents Only Stores filed for Chapter 11 bankruptcy and subsequently began a process to dispose of its assets, including its inventory, real estate and store leases.
Dollar Tree’s Growth Strategy
“As we continue to execute our accelerated growth strategy for the Dollar Tree brand, this was an attractive opportunity to secure leases in priority markets where we see strong potential for profitable growth,” said Michael Creedon, Jr., Dollar’s chief operating officer. Tree.
“The portfolio complements our existing presence and will provide us with access to high-quality real estate assets in premium retail centers, allowing us to rapidly grow the Dollar Tree brand throughout the Western United States, reaching even more customers and communities”.
Family Dollar stores closing list 2024
In March, Dollar Tree announced the closure of 600 Family Dollar store locations in 2024 has sent ripples through the retail industry. This move, combined with plans to close an additional 370 Family Dollar stores and 30 Dollar Tree locations upon lease expiration over the next few years, represents a significant reduction of about 15% of its Family Dollar branches.
ALSO READ. What Family Dollar stores are closing? Updated closing list
The Reasons Behind the Closures
- Economic Challenges: The primary factor driving these closures is the economic strain on low-income shoppers, a key demographic for Family Dollar. The rising tide of inflation has left many consumers with thinner wallets, prompting a shift towards price comparison and bargain hunting across various retailers.
- Increased Competition: As shoppers become more price-sensitive, Family Dollar faces stiff competition from other discount and bulk retailers. This shift in consumer behavior has significantly impacted the company’s sales figures.
- Shoplifting Issues: An uptick in shoplifting incidents has also eroded the bottom line. The retailer has pointed to this as a contributing factor to its decision to shutter a number of locations.
Community Impact
The closure of Family Dollar stores is more than a corporate decision; it has real implications for the communities they serve.
According to Dominick Miserandino of RetailWire, these stores often represent the only retail option in certain areas, providing both jobs and essential goods to local residents.
“These communities are dependent on these stores,” Miserandino emphasized to CBS News. The loss of Family Dollar could leave a void that would be hard to fill, affecting both employment and access to affordable goods.
Corporate Strategy
Dollar Tree’s acquisition of Family Dollar for over $8 billion nearly a decade ago was a strategic move to expand its footprint in the discount retail market.
However, the decision to close stores follows a “comprehensive review of our store portfolio,” according to a company email to CBS MoneyWatch. This review aimed to identify underperforming locations and reinvest resources into improving store standards and promoting growth. Despite the closures, the company has not released a comprehensive list of affected stores.
