Discount retailer Dollar Tree plans to close 390 Family Dollar stores this year while renovating 1,000 other locations, the company said in releasing its fiscal fourth-quarter earnings Wednesday.

"We are confident we are taking the appropriate steps to reposition our Family Dollar brand for increasing profitability as business initiatives gain traction in the back half of fiscal 2019," CEO Gary Philbin said in announcing the results.

Its renovated Family Dollar locations will sell alcohol and include a $1 Dollar Tree merchandise section. About 400 stores will get expanded freezer and cooler sections, and it will also rebrand about 200 Family Dollar stores to the Dollar Tree brand. It had 7,001 Dollar Tree locations and 8,236 Family Dollar stores as of Feb. 2.</s>FILE - This Aug. 19, 2014 photo shows the Family Dollar store in Ridgeland, Miss. Dollar Tree is closing up to 390 Family Dollar stores this year and rebranding about 200 others under the Dollar Tree name. The company closed 84 Family Dollar stores in the fourth quarter, 37 more than originally planned. (AP Photo/Rogelio V. Solis, File)

NEW YORK (AP) — Dollar Tree is closing up to 390 Family Dollar stores this year and rebranding about 200 others under the Dollar Tree name.

The company also slashed the value of its struggling Family Dollar chain, booking a $2.73 billion charge in its fiscal fourth quarter.

The company closed 84 Family Dollar stores in the fourth quarter, 37 more than originally planned. The company has said that it will renovate at least 1,000 stores this year. It also said it’s open to testing again new prices at Dollar Tree, where all items are priced under a dollar. Family Dollar sells items under $10.

Dollar Tree Inc., based in Chesapeake, Virginia, acquired Family Dollar in 2015 for almost $9 billion. The move was expected to bolster its business and better battle chains like Walmart and rival Dollar General Corp. But Family Dollar, hurt by unkempt stores, has struggled and pulled down the parent company’s earnings. And the company is under a lot of pressure from activist shareholder Starboard Value Hedge fund to sell Family Dollar or expand prices at its Dollar Tree stores.

In the latest fourth quarter, Family Dollar reported a 1.4 percent increase in sales at stores opened at least a year. Meanwhile, Dollar Tree had a 3.2 percent increase for that figure.

While prices are lower at Dollar Tree, Neil Saunders, managing director of GlobalData Retail, noted that Family Dollar has a more urban customer who has a lower income than the average Dollar Tree shopper. Most of the purchases at Family Dollar are done on a strict budget, he added.

“Dollar Tree has a much broader customer base, which includes more affluent shoppers,” Saunders wrote. “There are a lot more discretionary purchases made at Dollar Tree, despite the fact all products are a dollar or under. Visits to a Dollar Tree are not always made out of necessity. A lot of people go there out of curiosity and to see what’s on offer.”

The company said Wednesday that it’s seeking rent concessions on the potential 390 stores they want closed. Dollar Tree closes about 75 stores annually.

The company had 15,237 stores in 48 states and five Canadian provinces as of Feb. 2.</s>Dollar Tree Inc. is closing up to 390 Family Dollar stores this year and rebranding about 200 others under the Dollar Tree name. Connecticut has 56 Family Dollar stores according to its website.

The company also slashed the value of its struggling Family Dollar chain, booking a $2.73 billion charge in its fiscal fourth quarter. That led to a massive loss in the latest fiscal fourth quarter.

The company closed 84 Family Dollar stores in the fourth quarter, 37 more than originally planned. The company has said that it will renovate at least 1,000 stores this year. It also said it’s open to testing again new prices at Dollar Tree, where most items are priced at a dollar and nothing over that amount. Family Dollar sells most items for under $10.

Dollar Tree Inc., based in Chesapeake, Virginia, acquired Family Dollar in 2015 for almost $9 billion. The move was expected to bolster its business and better compete with chains like Walmart and rival Dollar General Corp. But Family Dollar, hurt by unkempt stores and uninspiring assortments, has struggled and pulled down the parent company’s earnings. And the company is under a lot of pressure from activist shareholder Starboard Value Hedge Fund to sell Family Dollar or expand prices at its Dollar Tree stores.

In the latest fourth quarter, Family Dollar reported a 1.4 percent increase in sales at stores opened at least a year. Meanwhile, Dollar Tree had a 3.2 percent increase for that figure.

While prices are lower at Dollar Tree, Neil Saunders, managing director of GlobalData Retail, noted that Family Dollar has a more urban customer who has a lower income than the average Dollar Tree shopper. Most of the purchases at Family Dollar are done on a strict budget, he added.

“Dollar Tree has a much broader customer base, which includes more affluent shoppers,” Saunders wrote. “There are a lot more discretionary purchases made at Dollar Tree, despite the fact all products are a dollar or under. Visits to a Dollar Tree are not always made out of necessity. A lot of people go there out of curiosity and to see what’s on offer.”

The company said Wednesday that it’s seeking rent concessions on the potential 390 stores they want closed. Dollar Tree closes about 75 stores annually.

The company had 15,237 stores in 48 states and five Canadian provinces as of Feb. 2. That’s in line with Dollar General’s store count.

Shares of Dollar Tree rose more than 4 percent, or $4.06, to $99.53 in afternoon trading.</s>Dollar Tree to close up to 390 Family Dollar stores

Dollar Tree is closing up to 390 Family Dollar stores this year and rebranding about 200 others under the Dollar Tree name.

The company closed 84 Family Dollar stores in the fourth quarter, 37 more than originally planned. The company has said that it will renovate at least 1,000 stores this year.

Dollar Tree Inc., based in Chesapeake, Virginia, acquired Family Dollar in 2015 for almost $9 billion.

The company said Wednesday that it’s seeking rent concessions from landlords at the 84 stores closed late last year and if it doesn’t get them, it’ll speed up the pace of store closings to as many as 390 locations. Dollar Tree closes about 75 stores annually.

The company had 15,237 stores in 48 states and five Canadian provinces as of Feb. 2.</s>Dollar Tree on Wednesday said it would close as many as 390 Family Dollar stores this year and rebrand about 200 more under its own banner. The discount chain also said it would write off $2.7 billion, or nearly a third of the value of Family Dollar, the struggling chain it bought in 2015 for nearly $9 billion following a bidding war.

"We are confident we are taking the appropriate steps to reposition our Family Dollar brand for increasing profitability as business initiatives gain traction in the back half of fiscal 2019," CEO Gary Philbin said in an earnings statement.

Shares of the Chesapeake, Virginia-based company rose 3 percent after it disclosed its restructuring plan and reported same-store sales had climbed 3.2 percent at the Dollar Tree brand stores, vs. 1.4 percent at Family Dollar stores, open at least a year.

Vying against the likes of Dollar General and Walmart, lackluster sales at Family Dollar have weighed on Dollar Tree's overall performance, prompting activist investor Starboard Value in January to call on management to explore a sale of the weaker business.

Dollar Tree also said it would look into pricing some items above a buck, another demand by Starboard.

The company operated 8,200 Family Dollar stores and 7,000 Dollar Tree stores at the end of the latest quarter.

Dollar Tree previously closed 122 Family Dollar stores in the fiscal year that ended Feb. 2, with 84 stores closing in the fourth quarter, 37 more than initially planned.</s>Discount retailer Dollar Tree plans to close 390 Family Dollar stores this year while renovating 1,000 other locations, the company said in releasing its fiscal fourth-quarter earnings Wednesday.

"We are confident we are taking the appropriate steps to reposition our Family Dollar brand for increasing profitability as business initiatives gain traction in the back half of fiscal 2019," CEO Gary Philbin said in announcing the results.

Its renovated Family Dollar locations will sell alcohol and include a $1 Dollar Tree merchandise section. About 400 stores will get expanded freezer and cooler sections, and it will also rebrand about 200 Family Dollar stores to the Dollar Tree brand. It had 7,001 Dollar Tree locations and 8,236 Family Dollar stores as of Feb. 2.

The company's earnings beat Wall Street estimates, which were heavily adjusted to exclude a $2.73 billion write-down against its Family Dollar business, among other charges.

On an adjusted basis, the Dollar Tree reported a profit of $1.93 per share during the 13 weeks ended Feb. 2 compared with average estimates of $1.92 a share compiled by Refinitiv. Sales at stores open for at least a year rose 2.4 percent versus an estimate of 1.5 percent. It generated $6.21 billion in revenue, better than the $6.19 billion expected by Wall Street but down slightly from $6.36 billion a year earlier.

On an unadjusted basis, the company had a loss of $2.31 billion, or a loss of $9.66 a share, compared with a profit of $1.04 billion, or $4.37 a share, during the same quarter last year, which included an extra week.

Shares of the company rose more than 4 percent in intraday trading Wednesday.

The report comes after activist investor Starboard Value, which has a 1.7 percent stake in the company, pressured Dollar Tree this January to change its pricing and sell the store.

The company opened 143 stores in the fourth quarter, closed 84 Family Dollar stores and 10 Dollar Tree stores and expanded or relocated 14 stores. It currently operates 15,237 stores across the U.S. and Canada.</s>The discount retailer, which its Family Dollar rival in 2015, says that it will shutter as many as 390 Family Dollar stores this year, change the name of roughly 200 more, and will start charging more than a dollar in some of its name sake stores.

The string of announcements came as Dollar Tree reported its fourth-quarter earnings.

The Chesapeake, Va.-based Dollar Tree bought its rival Family Dollar for $9.2 billion in 2015. but the brand has been ailing. The final number of Family Dollar stores that will close depends on its parent company's ability to get rent concessions from landlords, Dollar Tree said. It already closed 84 under performing Family Dollar stores in the fourth quarter, which was 37 more than it had originally planned to shutter last year.

It will also stamp its name on roughly 200 Family Dollar stores.

But Family Dollar is not the only company brand going through changes.

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Dollar Tree CEO Gary Philbin also mentioned plans to test selling items that cost more than a buck at its namesake chain, a shift that's reportedly been pushed by an activist investor.

Dollar Tree has tested the pricing change before, but Philbin shared no details about the locations where the new test will be done, what the new prices specifically will be, or how many items, or product categories, would be included.

It's a marked change for the brand, which has traditionally used $1 as its cut-off price point, while Family Dollar sold not only $1 items, but products that cost more.

John Zolidis, president of Quo Vadis Capital, said that because of its Family Dollar acquisition, Dollar Tree believes it now has the expertise to try to boost prices at its name sake stores. But it's a risky proposition.

"The $1-only proposition is what makes people love Dollar Tree so much,” Zolidis said. “Moving away from that brand equity does present a pretty significant risk to the concept on a long-term basis, if it becomes just another store. Right now, it’s unique.”

But in the short-term, testing higher prices could be helpful, he added. Doing so would raise the company's profit margins, as it faces pressures ranging from rising labor costs to tariffs, and possibly make up for the unexpected sluggish performance of the Family Dollar brand.

The chain is also trying to boost profits by closing stores, a move that could also create leverage when negotiating with its landlords, Zolidis said.

Dollar Tree still plans to invest in its Family Dollar brand, however,renovating at least 1,000 stores this year. The cost to remodel a store ranges from $100,000 to $150, 000, CFO Kevin Wampler said.</s>Dollar Tree is closing up to 390 Family Dollar stores this year and rebranding about 200 others under the Dollar Tree name.

The company closed 84 Family Dollar stores in the fourth quarter, 37 more than originally planned. The company has said that it will renovate at least 1,000 stores this year.

Dollar Tree Inc., based in Chesapeake, Virginia, acquired Family Dollar in 2015 for almost $9 billion.

The company said Wednesday that it’s seeking rent concessions from landlords at the 84 stores closed late last year and if it doesn’t get them, it’ll speed up the pace of store closings to as many as 390 locations.

The company had 15,237 stores in 48 states and five Canadian provinces as of Feb. 2.
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• $300 million vision for Santa Ana’s MainPlace mall sees a food emporium, more entertainment and hundreds of apartments</s>Family Dollar will close 390 stores nationwide this year on top of the 120 stores they closed in 2018.

Dollar Tree bought the company in 2015, but Family Dollar has since struggled.

Dollar Tree is under heavy pressure from an active investor to sell or revitalize the ailing line.

The company plans to re-brand Family Dollar as Dollar Tree, and renovate others with $1 Dollar Tree merchandise sections.

It is unknown which store locations will close.</s>Family Dollar will close 390 stores this year and make big changes to the stores it is keeping open as the discount chain seeks a turnaround.

Family Dollar sells a variety of items for under $10 at rural and urban locations. Dollar Tree bought the company in 2015. But Family Dollar has struggled, and Dollar Tree is under heavy pressure from an activist investor to sell or revitalize the ailing line.

Dollar Tree, which sells everything for $1 and caters more to mid-income customers with suburban stores, has a plan for Family Dollar: Close stores, re-brand some locations as Dollar Tree, and renovate others with $1 Dollar Tree merchandise sections.

“We are confident we are taking the appropriate steps to reposition our Family Dollar brand,” Dollar Tree CEO Gary Philbin said in a news release Wednesday.
Dollar Tree announces it will close 390 Family Dollar stores, and rebrand a further 200 Family Dollar stores as Dollar Tree.