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Family Dollar Focuses on Improving Urban Stores

MATTHEWS, N.C. -- National discount retailer Family Dollar Stores, Inc. here is investing $20 million to upgrade its urban stores.

The initiative, designed to give at least 1,000 of its units in 30 urban markets a makeover by year's end, was launched following double-digit net income declines in Family Dollar's two last quarters, according to published reports. The company cited the expenses incurred by expanding into urban markets. Analysts have criticized Family Dollar's upkeep of some of its stores in those markets.

The four major components in the urban initiative include: organizational changes, increased in-store support from a human resources and loss prevention standpoint, focusing more employees on specific tasks such as merchandising, and new technology.

As part of the initiative, the company has eliminated its district manager structure where one person was responsible for a large number of stores. Now Family Dollar will hire a larger number of area managers who will head smaller districts of about 25 stores each, allowing more hands-on contact with each store.

In addition, one or more stores in each urban area will be designated as a training store, with certified training managers who will train other managers at a continuous rate.

Family Dollar e.v.p. George Mahoney told the Charlotte Business Journal that the retailer has completed the initiative at 300 stores this quarter, and plans to do another 300 by the end of this quarter. Cities include Atlanta, Charlotte, Dallas, Chicago, and Boston.

With stores in 44 states, the company is the nation's second-largest retailer in its category, behind Dollar General.
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