Family Dollar to Close Nearly 400 Stores | Financial Buzz

Family Dollar to Close Nearly 400 Stores

Family Dollar, owned by Dollar Tree (NASDAQ: DTLR), will close 390 underperforming stores this fiscal year. As part of the Company’s 2019 Store Optimization Program, around 200 Family Dollar stores will be re-bannered to Dollar Tree. 1,000 Family Dollar locations will begin selling alcohol and include a $1 Dollar Tree product section. About 400 stores will get expanded freezer and cooler sections.

“We are confident we are taking the appropriate steps to reposition our Family Dollar brand for increasing profitability as business initiatives gain traction in the back half of fiscal 2019” said Dollar Tree CEO Gary Philbin. Family Dollar expects to see same-store sales increase up to 1.5% once all restructuring has been implemented.

The Company opened 143 stores in fourth quarter 2018 and closed 84 Family Dollar stores and 10 Dollar Tree stores.

Dollar Tree reported that sales at Family Dollar stores open at least a year rose 1.4% during the holiday period compared to a year earlier. Dollar Tree bannered stores saw 3.2% growth. Net sales for the thirteen-week fourth quarter 2018 were USD 6.21 Billion, compared to USD 6.36 Billion in the prior year’s fourth quarter, which included fourteen weeks. Gross profit for the quarter was USD 1.91 Billion, compared to USD 2.10 Billion in the prior year’s fourteen-week quarter.

Dollar Tree and Family Dollar combined forces in 2015 in a USD 8.5 Billion deal in the hopes of fending off larger retailers like Dollar General. The combined company currently operates over 15,000 stores across the U.S. and Canada. It will unify its headquarters under one roof in Chesapeake, Virginia this July.