Dollar Tree To Shut Down Nearly 1,000 Stores

Dollar Tree has missed market expectations for holiday-quarter sales and profit and laid out plans to shutter 970 of its Family Dollar stores, as the retailer looks to revamp the struggling business, reported Granth Vanaik and Anuja Bharat Mistry for Reuters.

The company, which operates around 16,774 stores, said it would close about 600 Family Dollar stores in the first half of fiscal year 2024 and 370 more over a period of a few years, along with 30 Dollar Tree outlets. I Photo: Mike Mozart, Flickr

Shares of the company fell about 14% in early trading after it also projected 2024 sales and profit below expectations. They also face stiff competition from rivals such as Walmart and Chinese e-commerce platform Temu.

"Our biggest problem right now is getting enough merchandise into the stores fast enough so the consumer can respond," said CEO Rick Dreiling, adding that Family Dollar was continuing to be hurt by macroeconomic uncertainties.

Dollar Tree acquired Family Dollar for more than $8 billion almost a decade ago after a bidding war with rival Dollar General, but it has had difficulty absorbing the chain, as reported by Michelle Chapman for the Associated Press (AP).

In November, Dollar Tree had said it would be reviewing its Family Dollar business, including potentially shutting down underperforming stores, to return to growth.

The company, which operates around 16,774 stores, said it would close about 600 Family Dollar stores in the first half of fiscal year 2024 and 370 more over a period of a few years, along with 30 Dollar Tree outlets, as their lease terms expire.

As a result, the company took a $594.4 million charge for a portfolio optimization review and incurred a goodwill impairment charge of $1.07 billion, as well as $950 million in other asset impairment charges in the reported quarter.

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