Dollar Tree plans to close nearly 1,000 stores between its namesake general discount store and subsidiary chain Family Dollar.
Family Dollar will close 600 stores in the first half of 2024 and 370 over the next few years as store leases expire, the company announced Wednesday.
Dollar Tree, which acquired Family Dollar in 2015 for $8.5 billion, also plans to close 30 stores as leases expire.
“The biggest challenge right now is getting enough product into stores quickly enough for consumers to respond,” said CEO Rick Dreiling, who said Family Dollar is responding to macroeconomic disruptions. He added that certainty continues to hurt.
In recent months, dollar stores have become more popular as consumers’ spending habits change in favor of e-commerce platforms such as Temu, a Chinese app that has soared in popularity by offering everyday essentials for as low as 99 cents. is in a predicament.
In November, Dollar Tree, which operates more than 16,700 stores, including more than 8,400 Family Dollar stores, said it would review its Family Dollar business to get back on track for growth, including potentially closing unprofitable stores. Announced.
The company incurred a $594.4 million charge for a portfolio optimization review after deciding to close approximately 1,000 stores, a goodwill impairment charge of $1.07 billion in the reported quarter, and a The company announced that it had incurred other asset impairment charges of $50 million.
Also Wednesday, Dollar Tree reported a net loss of $1.71 billion, or $7.85 per share, for the quarter ended Feb. 3, compared with a net loss of $452.2 million, or $2.04 per share, in the year-ago period. ) was a profit.
Revenue in 2024 is expected to be between $31 billion and $32 billion, according to LSEG data, with the midpoint lower than the expected $31.65 billion.
Representatives for Dollar Tree did not immediately respond to The Post’s request for comment.
Family Dollar has also been plagued by health and safety concerns recently. That included when the Food and Drug Administration announced that cinnamon sold by discount retailers was contaminated with high levels of lead.
A few weeks ago, Family Dollar pleaded guilty to selling goods imported from rodent-infested warehouses at 400 stores across the Southeast. As a result, it will pay a record $41.7 million fine to the federal government.
In 2022, the U.S. Food and Drug Administration found “live rodents, dead rodents, rotting rodents, and rodent feces” at the company’s warehouse in Arkansas, where it stored food, cosmetics, and medical devices. , urine, and odor. Ministry of Justice.
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