May 29 (UPI) — The national retailer Dollar Tree said Wednesday it took on 170 leased store locations in four states that recently were held by the 99 Cents Only store chain.
“As we continue to execute on our accelerated growth strategy for the Dollar Tree brand, this was an attractive opportunity to secure leases in priority markets where we see strong profitable growth potential,” Chief Operating Officer Michael Creedon Jr. said in a news release.
The California-based 99 Cents Only chain closed all 370 store locations after filing in April for bankruptcy.
Creedon said the 99 Cents Only portfolio will complement Dollar Tree’s existing footprint and will provide “access to high quality real estate assets in premium retail centers, enabling us to rapidly grow the Dollar Tree brand across the western United States, reaching even more customers and communities.”
Headquartered in Chesapeake, Va., Dollar Tree, will stock 99 Cents Only shelves with Dollar Tree products and reopen them later this year. Dollar Tree assumed 170 store leases across Arizona, California, Nevada and Texas in a deal completed via two transactions.
The deal was approved by a U.S. bankruptcy court in Delaware. Dollar Tree also will acquire select on-site furniture, fixtures and equipment that were owned by 99 Cents Only.
Los Angeles Mayor Karen Bass in April said resources were available for city residents who were impacted by 99 Cents Only’s closure of more than 30 stores in LA city limits.
“We must do all we can to support Angelenos during this difficult time,” the mayor said on X at the time.
The accumulation of new Dollar Tree store locations come after the chain announced in March plans to shut down 1,000 stores over the next several years amid a $1.89 billion fourth quarter operating loss. That followed a March 2019 announcement of plans to close nearly 400 stores that year.
In 2021, Dollar Tree said they were increasing prices from $1 to $1.25 in a move they claimed was intended to “continue offering extreme value to customers.”
At least 600 store closings are ready to happen this year alone. The company said a fourth-quarter review of its portfolio cost $594.4 million in charges.
Dollar Tree said in March its year-to-date financial results for 2024 compared to fiscal 2023 showed profits of $9.31 billion, which was a 4.3% increase, the company’s gross margin’s declined 110 basis points to 30.4%.
“Management felt that these locations are fundamentally good and in relatively short supply, so they took advantage of competitor weakness,” Michael Montani, an Evercore Inc. analyst said Wednesday.
