Discount retailer Dollar Tree is making major changes to its store portfolio after years of challenges integrating its Family Dollar chain acquisition. The company announced plans to close hundreds of its underperforming store locations in an effort to revive its business.
In their fourth-quarter earnings report, Dollar Tree revealed it will shutter approximately 600 Family Dollar stores in the first half of 2024 alone. An additional 370 Family Dollar and 30 Dollar Tree stores will also close over the next several years when their leases expire.
This comes after the retail company recorded a $950 million impairment charge against the Family Dollar trade name, following a $1.07 billion goodwill charge related to the struggling chain it acquired for over $8 billion in 2015 after an intense bidding war with Dollar General.
The store closures glaringly brings to light the challenges Dollar Tree has faced integrating Family Dollar, with analysts stating the company is still “sifting through the mess” nearly a decade after the acquisition.
The managing director at GlobalData, Neil Saunders, called the situation a ‘dramatic cull’ and said that it was,
“The coup de grâce in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015.”
Looking ahead, Dollar Tree expects full-year earnings of $6.70 to $7.30 per share on revenue between $31 billion and $32 billion as it optimizes its store footprint and focuses on better-performing locations.
