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Dollar Tree is closing 970 of its Family Dollar stores starting this year, a move that is likely to affect the more than 570 stores the company operates in Florida, including 124 in the region.
Chesapeake, Virginia-based Dollar Tree announced the closing Wednesday, saying 600 stores would shut down in the first half of this year and another 370 when the leases for those location ended.
The company also will close 30 Dollar Tree locations when those leases end.
A Dollar Tree spokesperson Wednesday did not answer a question about which stores in Florida would be closed nor how many employees will be affected.
The company did not post a list of stores slated to close.
According to the company’s 2023 annual report, as of January 2023 there were 8,206 Family Dollar stores ranging in size from 6,000 square feet to 8,000 square feet. Of those, about 570 are in Florida with 124 along the Gulf Coast.
In an email to the Business Observer, the spokesperson wrote the decision came after the company late last year “initiated a comprehensive review of our store portfolio to identify and address underperforming stores and invest in improved store standards and growth.
“Family Dollar and Dollar Tree stores are important to thousands of communities across this country. We owe it to those we serve to position all of (the) stores for success and meet the expectations of our valued customers and associates.”
According the company’s fourth-quarter earnings statement released on Wednesday, it incurred $594.4 million in charges in connection with the store closing process, which includes $80.6 million in inventory markdowns and $4.3 million in consulting fees.
“Long-lived asset impairment charges” made up $503.9 million of the charge.
Dollar Tree bought Family Dollar for more than $8 billion in 2015. At the time, the company said in a news release that the purchase created a “combined organization with sales exceeding $19 billion annually with more than 13,600 stores across 48 states and five Canadian provinces.”
Things haven’t worked out as expected, though.
“This is the coup de grâce in the rather botched acquisition of the Family Dollar chain,” says retail analyst Neil Saunders, a managing director at GlobalData Retail.
Saunders writes on LinkedIn that Family Dollar “wasn’t a particularly good business” when Dollar Tree made the deal. It had “weak operational control, a mediocre brand name and too many stores in sub-optimal locations.
“Almost 10 years on from the deal and Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around.”
According to the earning statement, Dollar Tree reported a net income loss of $1.71 billion in the fourth quarter compared with a $452.2 million profit over the same period last year.
Dollar Tree currently operates 16,774 stores.
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