Family Dollar has announced that it will close 390 stores over the course of 2019. That is considerably more than the company has closed in years past. In 2018, Family Dollar closed more than 120 of its stores, with 84 of the closures occurring in the fourth quarter. The company is now seeking rent concessions from landlords of those 84 locations.
The Family Dollar chain of stores is owned by Dollar Tree Inc. (NASDAQ: DLTR). Dollar Tree bought the company in 2015 for $8.5 billion, but both chains kept their distinct characteristics. Family Dollar specializes in selling products that cost less than $10 to low-income shoppers. Dollar Tree stores cater to customers who make more than Family Dollar customers do.
Since the closure of the deal, Family Dollar has struggled. In holiday quarter, Family Dollar reported quarterly same-store sales grew 1.4 percent. While that was higher than the 0.08 percent rise expected by analysts, it trailed the 3.2 percent increase seen at Dollar Tree stores during the same period.
The store closures are just one of the many changes the discount retailer is making to its business. Another 200 Family Dollar stores will be rebranded as Dollar Tree this year. Other Family Dollars will keep the name, but will carry $1 Dollar Tree merchandise and liquor sections. Renovations are planned for 1,000 Family Dollar stores. Dollar Tree CEO Gary Philbin said in a news release about the changes, “We are confident we are taking the appropriate steps to reposition our Family Dollar brand.”
Dollar Tree had 15,237 stores in 48 states and five Canadian provinces as of the beginning of February. About 8,000 of those stores are Family Dollar stores. The remaining 7,000 are branded as Dollar Tree stores. Dollar Tree typically closes about 75 stores annually.