Dollar Tree will close nearly 1,000 stores and swung to a surprise fourth quarter loss as the discount retailer took a related $1.07 billion goodwill impairment charge. Shares tumbled 15% before the opening bell Wednesday. Dollar Tree plans to close about 600 Family Dollar stores in the first half of this year and 370 Family Dollar and 30 Dollar Tree stores over the next several years. Dollar Tree acquired Family Dollar for more than $8 billion almost a decade ago after a bidding war with rival Dollar General, but it has had difficulty absorbing the chain.
Years of mismanagement and poor conditions in stores have hurt Family Dollar’s brand. Family Dollar, which is owned by Dollar Tree, was recently fined more than $40 million for a rat infestation at a warehouse that forced hundreds of stores to temporarily close. Decades-high inflation has hit shoppers hard, and a general consumer pullback has impacted Family Dollar customers and the chain’s profits, exacerbating its battle with discount competitors such as Dollar General, Walmart and others.
Associated Press
Comments are closed