Dollar Tree Announces Closure of Nearly 1,000 Family Dollar Stores

Dollar Tree has revealed plans to shut down almost 1,000 of its Family Dollar stores following disappointing performance throughout 2023, according to figures disclosed in a company press release. 

During the fourth quarter of 2023, Dollar Tree conducted a thorough review of its stores and determined that closure, relocation, or rebranding were the most viable options based on the results.

In the press release, the company stated, “As a result of this review, we plan on closing approximately 600 Family Dollar stores in the first half of fiscal 2024.

Additionally, approximately 370 Family Dollar and 30 Dollar Tree stores will close over the next several years at the end of each store’s current lease term.”

The announcement may come as a surprise to many, as the Family Dollar franchise has been synonymous with deeply discounted household items—a concept particularly favored as families grapple with rising living costs due to inflation.

However, the company’s review report indicates that they too have been impacted by inflated operating expenses.

Dollar Tree Financial Implications

According to the release, the company incurred charges totaling $594.4 million in connection with the store portfolio review.  Additionally, they faced a goodwill impairment charge of $1.07 billion and a trade name intangible asset impairment charge of $950 million.

Despite the closures, Chairman and Chief Executive Officer Rick Dreiling expressed optimism about the company’s future. 

He stated, “We finished the year strong, with fourth-quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments.”

Dreiling further added, “While we are still in the early stages of our transformation journey, I am proud of what our team accomplished in 2023 and see a long runway of growth ahead of us. 

As we look forward to 2024, we are accelerating our multi-price rollout at Dollar Tree and taking decisive action to improve profitability and unlock value at Family Dollar.” As of the date of this report’s publication, the specific locations of the stores slated for closure have not been released.