A decade after a ‘botched’ acquisition, Dollar Tree is liquidating almost 1,000 locations in the United States.


 Posted: Mar 24, 2024 4+:20 PM ET | Last Updated: March 24

In 2015, a discount retailer paid over $8 billion to acquire Family Dollar however, they had trouble integrating the chain.

Dollar Tree cut the value of a rival chain it bought over ten years ago, which led to a surprising fourth-quarter deficit and the closure of nearly 1,000 shops in the United States.

In addition to closing 30 Dollar Tree locations over the following few years, and around 600 Family Dollar locations in the first half of this year, Dollar Tree also has plans to close 370 Family Dollar locations.

After a bidding war with rival Dollar General, the discount retailer paid more than $8 billion US to acquire Family Dollar in 2015, but it has struggled to absorb the company.

Dollar Tree announced that, in addition to a $1.07 billion goodwill charge, it will register a $950 million US impairment against the trade name Family Dollar. Family Dollar will close or rebrand more than $594 million worth of locations, thus wiping out its holiday season revenues.

Dollar Tree’s stock fell more than 14% on Wednesday. Dollar Tree suffered a $1.71 billion US loss, or $7.85 per share, for the three months that ended on February 3. The Chesapeake, Virginia-based corporation made $452.2 million US, or $2.04 per share, a year earlier.

Revenue increased from $7.72 billion to $8.64 billion US, just less than Wall Street’s projected $8.67 billion.

As they look to reduce their expenditure, customers who have been hurt by inflation have been drawn to Dollar Tree.

Sales at Dollar Tree locations that have been open for a year or longer increased by 6.3% during the quarter, while traffic increased by 7.1%. Even though more people were visiting stores, they were spending more money—the average transaction decreased by 0.7 percent.

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