story by KIm Souza
ksouza@thecitywire.com
Editor's note: The story is corrected to note that the Family Dollar closures were first announced in April.
Family Dollar will soon shutter seven underperforming stores across the Natural State – a move resulting in up to 70 lost jobs.
Three of those Family Dollar locations are located in Northwest Arkansas and one is in the Fort Smith metro area, according to Bryn Winburn spokeswoman with Family Dollar. The company is in the process of being acquired by Dollar Tree in an $8.5 billion deal.
Winburn said Family Dollar is taking decisive action to position the company to be more successful in an adverse operating environment. She said after a full assessment, 370 of the retailer’s 8,246 stores were tagged as underperforming.
“We currently operate 115 stores in Arkansas. Over the next several weeks, we plan to close 7 underperforming stores. Each of our stores employs between 8-10 team members, and we will do everything we can to reassign impacted team members to nearby stores,” Winburn said.
The following stores are slated for closure by August 31.
• 1328 North College Ave. in Fayetteville
• 514 W. Centerton Blvd. in Centerton
• 113 East Pridemore Drive in Lincoln
• 230 Cloverlead Plaza in Van Buren
During a conference call Monday (July 28) Dollar Tree CEO Bob Sasser said the two dollar store chains had been in merger talks for several months. He expects the deal to close early next year, pending approval by Family Dollar shareholders and regulatory scrutiny.
Sasser told analysts during the call that the banners would remain in operation with the exception of underperforming stores. He said in some cases Dollar Tree locations could become Family Dollar and vice versa. The pro forma company will have more than 13,000 locations with a growing footprint in Canada as well.
The two chains operate with very different models, Family Dollar is mostly located in rural areas and offers a wide variety of discounted merchandise at low opening price points. Dollar Tree operates in strip centers within urban areas and sells all merchandise at $1. CNBC contributor Jim Cramer said the two banners are like an apples and oranges comparison.
“I am a huge Dollar Tree fan, they operate clean, well-run stores and are a great venue for purchasing seasonal merchandise. Family Dollar can benefit from Dollar Tree management. Together they will also be able to create synergies and help to negotiate better pricing on logistics and supplier pricing given their combined scale,” Cramer said.
Some analysts believe Wal-Mart might pick up some of the slack in the rural areas where Family Dollar stores are closing, given the retail giant is in the midst of rolling out more Express Store formats this year and next.
Decatur, a town of about 2,000 residents, has been earmarked for a new Walmart Express, the third small format built along Arkansas 59 by the retail giant. With the closing of the Family Dollar in Lincoln, Wal-Mart might see another opportunity fir ab Express Store or a Neighborhood Market.
Wal-Mart recently opened a Neighborhood Market in Centerton and will soon open a supercenter there, also.