Dollar Tree is moving into 99 Cents Only stores

 

Dollar Tree acquired leases for 170 of 99 Cents Only's stores out of bankruptcy in Arizona, California, Nevada and Texas.

Goodbye 99 Cents Only. Hello Dollar Tree.Dollar Tree announced on Wednesday that it has acquired leases for 170 stores previously owned by 99 Cents Only in Arizona, California, Nevada, and Texas. These stores, which were part of a bankruptcy filing by 99 Cents Only, will reopen under the Dollar Tree brand beginning in the fall.

99 Cents Only, which filed for bankruptcy in April and shuttered all 370 of its locations, was a regional chain focused on selling groceries. In contrast, Dollar Tree is a national chain that primarily offers discretionary items such as party supplies and home goods. Dollar Tree was known for selling everything for $1 before raising prices to $1.25 in 2021.

Dollar Tree also owns Family Dollar, a chain mostly found in urban areas, which has struggled compared to Dollar Tree and other discount chains. As a result, Family Dollar is closing 975 stores.

This acquisition allows Dollar Tree to expand more cost-effectively by taking over existing locations rather than building new ones, especially on the West Coast. According to Michael Montani, an analyst at Evercore IRI, Dollar Tree saw an opportunity to capitalize on the availability of these locations and the competitive weakness of 99 Cents Only.

A potential challenge for Dollar Tree is the size of the 99 Cents Only stores, which average about 20,000 square feet, more than double the typical size of a Dollar Tree store.