Family Dollar to Potentially Close Nearly 400 Stores Across U.S.

Family Dollar to Potentially Close Nearly 400 Stores Across U.S.

CNN Business reports the latest round of closures follow pressure from activist investor Jefferey Smith, CEO of Starboard Value, who earlier this year pushed the company to shed the Family Dollar brand and raise prices at its Dollar Tree stores, where everything sells for $1.

The renovated stores will include new $1 Dollar Tree merchandise sections, the company said.

"We are confident we are taking the appropriate steps to reposition our Family Dollar brand", said Gary Philbin, Dollar Tree CEO, in a written statement on Wednesday.

He added, "Our results demonstrate the increasing strength of the Dollar Tree brand, and accelerated progress on the Family Dollar turnaround, as Family Dollar delivered its strongest quarterly same-store sales growth of the year".

Same-store sales rose 1.4 percent at the smaller chain in the fourth quarter, the strongest in a year and pushing overall numbers up 2.4 percent, above an average analyst estimate of 1.5 percent rise, according to IBES data from Refinitiv. But Family Dollar, hurt by unkempt stores, has struggled and pulled down the parent company's earnings. There are more than 8,000 Family Dollar stores across the USA, including in 18 cities in Iowa (two of them in Cedar Rapids) and 100 in Wisconsin.

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Dollar Tree had 15,237 stores across 48 states and five Canadian provinces as of February 2.

A Dollar Tree spokesman didn't immediately return a message seeking additional information about potential New Jersey closings or new stores.

Three major USA retailers announced dozens of store closures over the last 24 hours. It's not known which stores will be closing but 200 will reopen as Dollar Tree locations, which sell every item for one dollar.

As of March 6, Dollar Tree's shares were up about 3 percent, The Street noted.

"The re-bannered Family Dollar stores have improved Dollar Tree's profitability by more than $55 million per year, which we expect to increase as more Family Dollar stores are re-bannered", the release continued.

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