The chain store, which has over 8,000 locations all over the country, announced that they'll be shuttering 390 of their locations due to heavy pressure from an activist investor.  

By Maressa Brown
March 06, 2019
Piggy bank and dollars
Credit: HTU/shutterstock

March 6, 2019

From budget-friendly craft supplies to everyday household items, dollar stores are regular stops for many parents all over the country. With 8,000 locations nationwide, Family Dollar may very well be the chain store that's most convenient for some families. But with nearly 400 locations shuttering, many families will be looking for an alternate spot to save. The retailer, which was bought by Dollar Tree in 2015, announced today, Wednesday, March 6, that they'll close 390 stores in 2019 and make changes to the stores they're keeping open. Just last year, they closed 120 stores.

The chain, known for selling a variety of items under $10, has struggled for years, and most recently, Dollar Tree felt pressure from an activist investor to sell or revitalize the brand, according to the Associated Press. 

"Dollar Tree significantly overpaid for Family Dollar, and this business is proving to be a meaningful distraction," Jeffrey Smith, CEO of Starboard Value, wrote to the company in January, according to CNN. "The underperformance at Family Dollar since the acquisition has persisted long enough."

The difference between Dollar Tree and Family Dollar? The former is big in suburban areas, sells everything for $1, and caters to mid-income customers. It sounds like the company's plan will be to bring a bit of Dollar Tree style to Family Dollar locations in order to re-brand. Specifically, they'll re-brand 200 locations as Dollar Tree and renovate others with $1 Dollar Tree merchandise sections (sounds a bit like Target's Bullseye's Playground). At the same time, Dollar Tree will reportedly begin testing higher-priced products at its stores.

In a news release, Dollar Tree CEO Gary Philbin said, "We are confident we are taking the appropriate steps to reposition our Family Dollar brand.”

Only time will tell how these changes shake out. In the meantime, these changes may have many families rethinking where they'll shop for budget-friendly supplies.