Dollar Tree, $DLTR, will shut down nearly 1,000 Family Dollar stores

The company announced its decision to close nearly 1,000 of its Family Dollar stores due to significant underperformance in 2023, according to a press release.

During the fourth quarter of 2023, Dollar Tree conducted a review of its store performance to identify locations for closure, relocation, or rebranding, 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 company said in the press release.

"We finished the year strong, with fourth-quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments," said Chairman and CEO Rick Dreiling.

"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 in 2024, we are accelerating our multi-price rollout at Dollar Tree and taking decisive action to improve profitability and unlock value at Family Dollar."

The specific locations of the store closures have not yet been revealed by Dollar Tree.

Dollar Tree acquired Family Dollar in July 2015, with then-CEO Bob Sasser calling the transaction "a transformational opportunity for our business to offer broader, more compelling merchandise assortments, with greater values, to a wider array of customers."

Dollar Tree operates 16,774 stores across 48 states and five Canadian provinces as of Feb. 3, under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada.

In February, Family Dollar Stores agreed to pay $41.6 million for storing food, cosmetics, drugs, and medical devices in a rat-infested warehouse in Arkansas for years, court records show. The company admitted to shipping products until January 2022 from its Arkansas distribution center, where the FDA found evidence of live rodents, dead and decaying rodents, rodent feces and urine, and evidence of gnawing and nesting, court records show.