The buck stops here…
Dollar Tree has announced plans to close 1,000 stores over the next 12 months, after the company revealed a surprise Q4 loss largely stemming from its move to slash the value of subsidiary Family Dollar, the rival it acquired almost 10 years ago.
The iconic chain store — where customers could once browse aisles brimming with sub-$1 bargains, but can now expect to pay up to $5 for some products — has become a “victim of the macro environment”, according to a statement from CEO Rick Dreiling on Wednesday. Even so, the company has also struggled with basic operations, receiving a ~$41m fine over a rodent-infested warehouse just 3 weeks ago.
Store of value
The lion’s share of closures will affect Family Dollar, which Dollar Tree picked up for ~$8.5bn in 2015, following an extended bidding war with Dollar General. Indeed, the parent company plans on closing 600 Family Dollar stores in the first half of this year, followed by a further 370 in the second half, taking the company's total store count below 16,000.
This would be the first time that the Tree’s total location tally has dropped in 3 decades, having added branches every single year since 1994, when they counted just 409 stores across the US and Canada. However, with slumping sales and most prices already forced up to the $1.25 mark ~2 years ago, Dollar Tree’s greenest years might be behind it.
