In a major consolidation move, Dollar Tree has announced the acquisition of leases for 170 99 Cents Only stores out of bankruptcy in Arizona, California, Nevada, and Texas. The stores will be reopened under the Dollar Tree brand with their products starting in the fall. This move comes after 99 Cents Only filed for bankruptcy in April, leading to the closure of all 370 locations.
The acquisition marks a significant consolidation in the retail industry as the two chains differ significantly in their offerings and target markets. While 99 Cents Only predominantly sold groceries as a regional chain, Dollar Tree, a national company with suburban locations, specializes in discretionary merchandise such as party supplies and home goods.
This move presents growth opportunities for Dollar Tree as it allows them to expand their reach and presence on the West Coast through a cost-effective way. The acquisition of 99 Cents Only leases also provides Dollar Tree with an opportunity to capitalize on competitor weaknesses and expand its footprint in the market. However, one potential challenge could be the size of the 99 Cents Only stores which are around 20,000 square feet on average which is more than double the typical size of a dollar store chain. Despite this analysts view this acquisition as strategic decision that will help Dollar Tree to expand its business further and increase its market share.