Retail  January 22, 2015

Dollar Tree, Family Dollar stores to survive merger

Shareholders of Family Dollar voted overwhelmingly early Thursday to approve the discount retailer’s $8.5 billion takeover by rival Dollar Tree, but how the chains’ stores in Northern Colorado and the Boulder Valley would be affected remains unclear.

Chesapeake, Va.-based Dollar Tree Inc. (Nasdaq: DLTR) currently has three stores open in Fort Collins, two each in Greeley and Longmont, and one each in Loveland, Windsor and Louisville. Matthews, N.C.-based Family Dollar Stores Inc. (NYSE: FDO) has one store each in Loveland, Longmont, Dacono, Fort Lupton and Brighton. A Dollar Tree recently closed in Boulder, and a Family Dollar recently closed in Longmont.

Both brands will survive, according to Dollar Tree officials.

SPONSORED CONTENT

Ways to thank a caregiver

If you have a caregiver or know someone who has been serving as a primary caregiver, March 3rd is the day to reach out and show them how much they are valued!

“We intend to operate and grow both banners,” said Bob Sasser, Dollar Tree chief executive, in a media statement. “At Dollar Tree stores, everything is $1, while Family Dollar stores will continue to serve low- to middle-income customers with name-brand consumables, home basics, variety and seasonal products at discount-store prices. By utilizing the $1 fixed-price point in Dollar Tree and multi-price points at Family Dollar, we will deliver even greater value and choice to a broader range of consumers.”

Sasser’s statement also sought to reassure Family Dollar employees.

“We are eager to welcome Family Dollar associates to the Dollar Tree team,” Sasser said. “We appreciate the dedication and hard work of Family Dollar’s associates throughout the integration planning process, and we look forward to working together to further grow and improve the Family Dollar brand.”

The merger initially would give the company more than 13,000 stores in 48 states and five Canadian provinces. Even so, Dollar Tree will have to close or sell some stores under both brands, and expected to reach a preliminary agreement with the Federal Trade Commission on the list of stores to be divested by the end of the month.

Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) could be among potential buyers as they seek to expand their small-format stores such as the Walmart Neighborhood Market that opened in 2013 at 2972 Iris Ave. in Boulder, said Rahul Sharma, managing director of investment advisory firm Neev Capital.

According to a Reuters report last week, Family Dollar had warned that regulators would want more than 1,500 stores divested after the merger, but the same report quoted unnamed Dollar Tree officials as saying they thought they could shed as few as 300.

Approval of the merger of Dollar Tree with Family Dollar came after a drawn-out drama involving hedge-fund investors such as Carl Icahn and a failed bid by another rival, Goodlettsville, Tenn.-based Dollar General Corp. (NYSE: DG). After Icahn emerged with a nearly 10 percent stake in Family Dollar last summer, Dollar General made a $9.7 billion offer that Family Dollar rejected because of antitrust issues.

Shareholders of Family Dollar voted overwhelmingly early Thursday to approve the discount retailer’s $8.5 billion takeover by rival Dollar Tree, but how the chains’ stores in Northern Colorado and the Boulder Valley would be affected remains unclear.

Chesapeake, Va.-based Dollar Tree Inc. (Nasdaq: DLTR) currently has three stores open in Fort Collins, two each in Greeley and Longmont, and one each in Loveland, Windsor and Louisville. Matthews, N.C.-based Family Dollar Stores Inc. (NYSE: FDO) has one store each in Loveland, Longmont, Dacono, Fort Lupton and Brighton. A Dollar Tree recently closed in Boulder, and a Family Dollar recently closed in Longmont.

Both…

Dallas Heltzell
With BizWest since 2012 and in Colorado since 1979, Dallas worked at the Longmont Times-Call, Colorado Springs Gazette, Denver Post and Public News Service. A Missouri native and Mizzou School of Journalism grad, Dallas started as a sports writer and outdoor columnist at the St. Charles (Mo.) Banner-News, then went to the St. Louis Post-Dispatch before fleeing the heat and humidity for the Rockies. He especially loves covering our mountain communities.
Sign up for BizWest Daily Alerts