After posting a $1.7 billion fourth-quarter loss, Dollar Tree said it plans to close nearly 1,000 stores under its own banner and that of its once-rival, Family Dollar.
“During the fourth quarter of fiscal 2023, the Company announced that it had initiated a comprehensive store portfolio optimization review, which involved identifying stores for closure, relocation, or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors,” according to an announcement on March 13.”As a result of this review, we plan on closing approximately 600 Family Dollar stores in the first half of fiscal 2024.”
Another 370 Family Dollar and 30 Dollar Tree stores will close over the next several years, the company said.
“In the fourth quarter of 2023, we incurred $594.4 million of charges in connection with the store portfolio review. Additionally, we incurred a goodwill impairment charge of $1.07 billion and a trade name intangible asset impairment charge of $950 million.”
In 2015, Dollar Tree acquired Family Dollar for $8 billion, the Associated Press reported.
‘This dramatic cull is the coup de grâce in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015,” said Neil Saunders of GlobalData, according to AP. “Basically, almost ten years on, Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around.”
At opening bell on Wednesday, Dollar Tree shares fell 14% to $128.74 on NASDAQ.
