Dollar Tree Acquires Family Dollar, Stores in HP, OP and Ferndale/RO Twp to Close

mbrew brought to you by top adDollar Tree Acquires Family Judy_Palmer30yearsDollar, Stores in HP, OP and Ferndale/RO Twp to Close

(Crystal A. Proxmire, July 8, 2015)

Over 330 Family Dollar Stores are expected to be sold and closed as part of the chain’s sale to Dollar Tree, including 25 in Michigan. According to a list obtained by Coupons in the News, locations in Ferndale (Royal Oak Township), Hazel Park and Oak Park will be closed due to regulatory issues over competitiveness.

The stores in question are being sold to Sycamore Partners, who own many brands including Aeropostale, Coldwater Creek and Talbots. Their plan, according to various reports, is to turn the newly-acquired stores into a new chain called Dollar Express. Most of the storesSahara ad with wine are close to Dollar General stores, and they are expected to compete.

The settlement gives a deadline of 150 days for the sale of the 330 stores. These stores represent about $45.5 million of operating income for Family Dollar.

It is unclear how quickly Dollar Express will be ready to move in. This could add to concerns in communities like Hazel Park, where the city is fighting to convince drugstore chain CVS to fill their two vacant buildings in the city.

The $9 billion sale means that Family Dollar and Dollar Tree will continue to serve customers looking for inexpensive items, while also competing with Dollar General and Dollar Express. Dollar Tree has stores in Oak Park and Hazel Park.

Family Dollar released a statement giving insight into the decision:CFSEM-123-OaklandCounty115-digital-ad_v2

Statregic Rationale

~Creates a leading discount retailer in North America. The combined organization will operate more than 13,000 stores in 48 states and five Canadian provinces, with sales exceeding $19 billion annually and over 145,000 associates.

~Complementary business model across fixed- and multi-price point. Dollar Tree is the nation’s leading operator of fixed-price point stores, selling everything for $1 or less, and Family Dollar is a leading national operator of multi-price point stores providing value-conscious consumers with a selection of competitively priced merchandise in convenient neighborhood stores. The Company intends to retain and to grow both banners going forward and will optimize the combined real estate ctechadportfolio.

~Targets broader range of customers and geographies. Dollar Tree targets customers within a broad range of Middle America with stores located primarily in suburban areas and Family Dollar targets low- and lower-middle income households through its urban and rural locations. The transaction enables Dollar Tree to serve a broader range of customers and deliver even greater value to them.

~Leverages complementary merchandise expertise. Dollar Tree’s merchandise mix consists of a balance between consumable merchandise and variety/seasonal merchandise. Family Dollar’s assortment consists primarily of consumable merchandise and home products. The complementary offerings enable the Dollar Tree and Family Dollar brands to expand steele lindbloom adcategories and to deliver a broader, more compelling assortment to all customers.

~Generates significant synergy opportunities. Dollar Tree expects to generate significant efficiencies through sourcing and procurement, format optimization, SG&A leverage, and its distribution network. The Company anticipates that the transaction will result in an estimated $300 million of annual run-rate synergies to be fully realized by the end of the third year post-closing.

~Enhanced financial performance and improved growth prospects. Dollar Tree will be better positioned to invest in existing and new markets and channels and to grow its store base across multiple brands. The combined company expects to generate significant free cash 711 ad slurpeeflow, enabling it to pay down debt rapidly.

“We are pleased to announce we have completed our acquisition of Family Dollar and we formally welcome the Family Dollar team to the Dollar Tree organization,” stated Bob Sasser, Chief Executive Officer. “This is a transformational opportunity for our business to offer broader, more compelling merchandise assortments, with greater values, to a wider array of customers. This acquisition will extend our reach to low-income customers, while strengthening and diversifying our footprint. We plan to leverage best practices across both organizations to deliver significant cost synergies. Combined, our growth potential is enhanced with improved opportunities to increase store productivity and to open more stores across multiple banners.

“We appreciate the efforts, dedication and teamwork displayed by both Dollar Tree and Family DDAnew01Dollar associates throughout our integration planning processes. We are well-prepared to integrate our two companies.”

 

Under the terms of the merger agreement first announced and unanimously approved by each company’s Board of Directors in July 2014, Family Dollar shareholders are entitled to receive $59.60 in cash and 0.2484 of a share of Dollar Tree common stock for each share of Family Dollar common stock.

“Dollar stores offer convenience and value by providing a broad assortment of general merchandise at discounted prices in stores close to where consumers live or work,” Debbie Feinstein, director of the FTC’s Bureau of Competition, said in a news release. “This settlement will ensure that consumers will continue to benefit from competition among their local dollar stores.”

A more thorough look at the issues involved in the merger was written for DailyFinance.com. Check it out at http://www.dailyfinance.com/2015/01/28/family-dollar-dollar-tree-future/.

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Oakland County Times has written 7996 articles for The Oakland County Times

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