Dollar Tree buys 99 Cents Only stores out of bankruptcy

Nathaniel Meyersohn, CNN

New York (CNN) — Goodbye 99 Cents Only. Hello Dollar Tree.

Dollar Tree announced Wednesday it acquired leases for 170 of 99 Cents Only’s stores retired of bankruptcy successful Arizona, California, Nevada and Texas. Dollar Tree will reopen these stores pinch its ain products nether its marque opening successful nan fall.

99 Cents Only had revenge for bankruptcy successful April and closed each of its 370 locations.

The 2 chains are very different, and nan announcement is simply a motion of consolidation successful nan unit industry.

99 Cents Only was a location concatenation and sold groceries. Dollar Tree, a nationalist institution pinch mostly suburban locations, chiefly offers discretionary merchandise for illustration statement supplies and location goods. Dollar Tree was nan past dollar shop concatenation to waste everything for $1 earlier raising prices successful 2021 to $1.25 and above.

Dollar Tree besides owns Family Dollar, based mostly successful cities. Family Dollar has underperformed Dollar Tree and different discount chains successful caller years, and it’s closing 975 stores.

The acquisition of 99 Cents Only leases retired of bankruptcy gives Dollar Tree a cheaper measurement to turn alternatively than building caller stores and helps nan Virginia-based concatenation widen its scope connected nan West Coast.

“Management felt that these locations are fundamentally bully and successful comparatively short supply, truthful they took advantage of competitor weakness,” Michael Montani, an expert astatine Evercore IRI, wrote successful a statement to clients Wednesday.

One situation for Dollar Tree could beryllium nan size of 99 Cents Only stores.

99 Cents Only stores are connected mean astir 20,000 quadrate feet, much than double nan size of a emblematic dollar shop chain.

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