BY Staff WritersMay 30, 2024
3 weeks ago
BY 
 | May 30, 2024
3 weeks ago

Dollar Tree Takes Over 170 Stores From Bankrupt 99 Cent Only In Key States

Dollar Tree has purchased 170 stores from the bankrupt 99 Cents Only chain in California, Arizona, Nevada, and Texas and plans to reopen them under new branding this fall.

This acquisition allows Dollar Tree to expand in prime markets by taking over the leases of the former 99 Cents Only stores.

According to Daily Mail, the acquisition was announced after 99 Cents Only Stores declared bankruptcy and decided to liquidate all 371 locations due to increasing inflation and theft.

Significant Boost For Budget-Conscious Shoppers

Dollar Tree's takeover is not just a growth strategy but a significant boon for budget-conscious consumers in the four states involved.

By acquiring these store locations, Dollar Tree ensures that a 99 Cents Only Stores segment continues to serve its customer base under possibly retained or rebranded identities.

Michael Creedon Jr., Dollar Tree's COO, emphasized the strategic nature of this acquisition. He expressed enthusiasm about integrating these stores into their accelerated growth strategy, identifying the locations as being in "priority markets with strong profitable growth potential."

The decision to salvage these parts of 99 Cents Only Stores will allow Dollar Tree to potentially operate some locations under the existing branding or adopt new branding aligned with their traditional store concept. This flexibility offers an advantage in penetrating markets where Dollar Tree has had a limited presence.

New Opportunities In Premium Retail Centers

Creedon highlighted an exciting feature of the acquisition – the chance to establish outlets in "premium retail centers." According to him, these are areas where Dollar Tree previously lacked presence, offering a route to rapid regional expansion.

This tactical move by Dollar Tree signifies a deeper penetration into the southwestern retail market, enhancing its visibility and accessibility to a broader consumer base. The planning phase for reopening these stores is already underway, with doors expected to open as early as the fall of 2024.

Despite the acquisition, specific details regarding the exact addresses of the new stores remain undisclosed. This suggests that significant planning and restructuring may still be needed to ensure a seamless transition and integration of these new assets into the Dollar Tree portfolio.

Competition Heats Up With Ollie’s Bargain Outlet

In a parallel development, Ollie’s Bargain Outlet has also entered the market by acquiring 11 former 99 Cents Only Stores in Texas.  The deal, worth $14.6 million, underscores the region's attractiveness to retail investors and highlights the competitive nature of the discount retail market.

John Swygert, CEO of Ollie’s, expressed excitement over their acquisitions. He underscored the strategic importance of these locations due to their favorable size, strong trade area placements, and appealing rent and leasing structures.

Swygert also pointed out that Texas continues to experience robust population growth, making it an ideal market for expansion and potentially lucrative operations for bargain retailers like Ollie’s.

Implications For Local Economies And Job Markets

The economic implications of these acquisitions are significant. Not only do they prevent the complete shuttering of 170 retail locations, but they also preserve hundreds, perhaps thousands of jobs, thus contributing positively to the local economies in the affected states.

Furthermore, Dollar Tree and Ollie’s Bargain Outlet's presence in these locations is likely to stimulate economic activity, attract more consumers, and create a competitive but healthy market environment that benefits all stakeholders.

As fall 2024 approaches, Arizona, California, Nevada, and Texas communities are watching closely. The revitalization of these shopping locations under new management could breathe new life into local retail landscapes and offer renewed employment opportunities.

A Fresh Start For Former 99 Cents Only Stores

As Dollar Tree moves forward with its plans, the retail landscape in the southwestern United States is set to witness significant transformations. Integrating former 99 Cents Only Stores into the Dollar Tree brand—or potentially retaining the old brand in some cases—illustrates a well-strategized approach to asset utilization and market expansion.

Despite intense competition and challenging economic conditions, these developments signal a positive outlook for the discount retail sector, promising affordability and accessibility for consumers while ensuring sustained growth and stability for the investors and operators involved.

Written by: Staff Writers

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