Dollar Tree will be closing nearly 1,000 of its Family Dollar stores after the stores underperformed in 2023, per figures shared in a company press release.
It stated that during the fourth quarter of 2023, Dollar Tree reviewed its stores and concluded the best next step was closure, relocation or re-bannering based on results.
“As a result of this review, we plan on closing approximately 600 Family Dollar stores in the first half of fiscal 2024. Additionally, approximately 370 Family Dollar and 30 Dollar Tree stores will close over the next several years at the end of each store’s current lease term,” the company shared in the press release.
This may come as a shock since the Family Dollar franchise has become synonymous with deeply discounted household items, a favored concept as many families grapple with rising living costs caused by inflation. From the looks of the company’s review report, they too have been affected by inflated operating expenses.
Per the release, the company incurred $594.4 million of charges in connection with the store portfolio review. Additionally, they faced “a goodwill impairment charge of $1.07 billion and a trade name intangible asset impairment charge of $950 million.”
“We finished the year strong, with fourth quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments,” said Chairman and Chief Executive Officer, Rick Dreiling in a statement. He adds: “While we are still in the early stages of our transformation journey, I am proud of what our team accomplished in 2023 and see a long runway of growth ahead of us. As we look forward in 2024, we are accelerating our multi-price rollout at Dollar Tree and taking decisive action to improve profitability and unlock value at Family Dollar.”
Per date of this report’s publishing, the locations of the stores that are closing have not yet been released.