Dollar Tree to Close 600 Family Dollar Stores in 2024
During the fourth quarter of fiscal 2023, Dollar Tree Inc. announced it had initiated a comprehensive review of its store portfolio to address locations that are not aligned with the company's transformative vision. This involved identifying stores for closure, relocation or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors. As a result of this review, the company plans on closing approximately 600 Family Dollar stores in the first half of fiscal 2024. Approximately 370 Family Dollar and 30 Dollar Tree stores will also close over the next several years at the end of each store’s current lease term.
The discount chain is no stranger to encountering operational hardships.
Dollar Tree reached a resolution last month on the U.S. Department of Justice’s (DOJ) investigation into the operations at Family Dollar’s distribution center in West Memphis, Ark. The company agreed to enter a plea of guilty to a one-count misdemeanor violation relating to acts that caused adulterated product after the investigation revealed rodent infestation.
[RELATED: Dollar Tree Reports $1.7B Net Loss in Q4]
Also last month, a class action was filed alleging that Dollar Tree and its Family Dollar subsidiary sold unsafe over-the-counter (OTC) medicines and personal care items even after an FDA report informed the dollar store retailer that these items were being stored improperly.
Additionally, Dollar Tree experienced a recent cyberattack that exposed the names, dates of birth and Social Security numbers of former and current Dollar Tree and Family Dollar employees, affecting roughly 2 million individuals in total.
Dollar Tree released its fiscal 2024 outlook, which reflects approximately $0.15 of EPS benefit from the anticipated Family Dollar store closures, mostly in the second half of the year as it closes underperforming stores throughout the first half of fiscal 2024.
Chesapeake, Va.-based Dollar Tree operates 16,622 Dollar Tree, Family Dollar and Dollar Tree Canada stores across 48 states and five Canadian provinces as of Oct. 28, 2023. The company is No. 21 on The PG 100, PG’s 2023 list of the top food and consumables retailers in North America.
