In a strategic move aimed at bolstering its market presence, Dollar Tree, a prominent Fortune 200 discount variety store chain, announced on Wednesday the acquisition of designation rights for 170 leases from the bankrupt 99 Cents Only Stores. This acquisition spans key markets across Arizona, California, Nevada, and Texas. The deal, completed through two transactions in May, received approval from the United States Bankruptcy Court for the District of Delaware, underscoring Dollar Tree’s commitment to strategic growth.
As of early February, Dollar Tree operates an impressive network of over 15,500 stores across 48 U.S. states and five Canadian provinces. The Virginia-based retail giant continues to cement its position as a leading player in the discount retail sector. The recent acquisition also includes the North American Intellectual Property of 99 Cents Only Stores, along with select on-site furniture, fixtures, and equipment, according to a press release from Dollar Tree.
Michael Creedon, Jr., Chief Operating Officer of Dollar Tree, emphasized the strategic value of this acquisition. “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,” Creedon stated. He highlighted that the newly acquired portfolio will enhance Dollar Tree’s existing footprint, granting access to high-quality real estate assets in premium retail centers. This move will facilitate the rapid expansion of the Dollar Tree brand across the western United States, reaching a broader customer base and more communities.
Dollar Tree anticipates welcoming customers from the former 99 Cents Only Stores as early as fall 2024. This acquisition marks a significant milestone in Dollar Tree’s expansion strategy, positioning the company for robust growth in the highly competitive discount retail market.
The acquisition comes in the wake of significant turmoil for 99 Cents Only Stores. The California-based discount retailer filed for bankruptcy in April, initiating a comprehensive asset disposal process. This included the liquidation of its inventory, owned real estate, and store leases. In a statement, 99 Cents Only Stores announced plans to close all 371 of its locations, bringing an end to more than four decades of operation.
The consolidation trend in the retail industry is evident, with another discount retailer, Ollie’s Bargain Outlet, also capitalizing on 99 Cents Only Stores’ bankruptcy. Earlier this month, Ollie’s announced the acquisition of 11 former 99 Cents Only Stores locations, further indicating the shifting dynamics within the discount retail sector.
CNN, in its report on the acquisition, pointed out the distinct differences between Dollar Tree and 99 Cents Only Stores. While 99 Cents Only Stores operated as a regional chain with a focus on groceries, Dollar Tree is a national entity predominantly located in suburban areas, offering a wide range of discretionary merchandise such as party supplies and home goods. This divergence highlights the strategic rationale behind Dollar Tree’s acquisition, aimed at enhancing its product offerings and market reach.
Dollar Tree’s latest move underscores its aggressive growth strategy and adaptability in the face of industry consolidation. By acquiring prime real estate and assets from 99 Cents Only Stores, Dollar Tree is well-positioned to strengthen its market presence and drive profitable growth. This acquisition not only expands Dollar Tree’s geographical footprint but also enhances its ability to serve a diverse and growing customer base across the western United States.
As the retail landscape continues to evolve, Dollar Tree’s strategic acquisitions and robust expansion plans signal its determination to maintain a leading position in the discount retail market. With the integration of 99 Cents Only Stores’ assets, Dollar Tree is poised for a new chapter of growth and success, benefiting both its customers and shareholders.
In conclusion, Dollar Tree’s acquisition of 170 leases from 99 Cents Only Stores represents a significant step in its expansion strategy. By leveraging these newly acquired assets, Dollar Tree aims to enhance its market presence, drive growth, and better serve its customers across key markets in the western United States.
