A massive discount retailer is now closing 600 stores by the end of the year due to the fast pace of rising inflation, sources confirm.
Shopping giant Family Dollar is set to close 600 of their US stores by the end of the year.
The heartbreaking news comes as a shock to the millions who use America’s second largest variety retailer, reports The US Sun.
Despite being a great place for families to shop, the company has come under pressure due to rising levels of inflation.
It is being reported the rise weakened the buying power of the retailer’s customer base.
This has caused buyers to look elsewhere for the best deals possible so they can cut costs, according to CBS News.
Stores across the US are claiming shoplifting is also on the rise, causing serious issues in the industry.
A press release by the companies Chairman and Chief Executive Officer Rick Dreiling detailed the closure.
It said they were “making decisive action to improve profitability and unlock value at Family Dollar”.
The company’s quarterly revenue failed to meet Wall Street expectations at $8.46 billion compared to the estimated $8.66 billion.
Dollar Tree reported a profit of $452.5 million last year, it has now reported a net loss of $1.71 billion in the fourth quarter with market shares dropping 8% after the results of its fourth quarter.
Dollar Tree has announced that 600 of its Family Dollar stores will close for good this year.
An additional 370 spots will be shut down over the next few years when the leases expire on the stores.
This will also lead to 30 Dollar Trees closing.
In total a staggering 15 per cent of all Dollar Tree storefronts are going for good.
The full list of Family Dollar stores closing down hasn’t been formally announced yet but CBS has compiled a partial list of those already named.
These include over 20 in Mississippi and multiple in Ohio, Illinois, North Carolina, Virginia and Missouri.
Dollar Tree said they opened up 641 new stores in the last financial year however.
The beloved chain has been under Dollar Tree’s ownership since 2015.
It was reportedly acquired for a whopping $8.5billion.
Dollar Tree has begun raising prices across their stores to try and make up for the drastic losses.
There are currently over 8,000 Family Dollar locations across the US.
The brand’s main rivals include Dollar General and Walmart.
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Other Economy News Today
A luxury clothing retailer now makes unexpected layoffs, part of a new ‘organizational structure’, the company announced.
Canada Goose is cutting its corporate roles by 17%, the luxury outerwear brand said on Tuesday.
That includes some shakeup among executives, including the March 19 departure of Chief Operating Officer John Moran, per a company press release.
Beth Clymer, who is president of finance, strategy and administration, will add operations to her role.
Carrie Baker, president of brand and commercial, will expand her responsibilities to also include design, working closely with CEO Dani Reiss.
And Chief Transformation Officer Daniel Binder will now also oversee global stores in addition to responsibilities in sales planning and operations.
This strategic review and realignment of resources come as Canada Goose faces declines, particularly in North America, challenged comp sales and slowing sales in China, even in cold weather favorable to sales of its gear, reports The Dive.
The brand is realigning its teams to ensure its resources effectively fuel growth, Reiss said in a statement.
“We are focused on achieving efficiency and margin expansion, while investing in key initiatives – brand, design and best-in-class operations – that will powerfully position our iconic performance luxury brand to deliver long-term growth,” he said.
“While the decision to reduce our workforce was difficult, it was the right decision to put our business in the best position for the future.”
In early 2023, the brand had announced it would double its brick-and-mortar footprint over five years.
But a year on, after a disappointing Q3 report, Evercore analysts suggested that was likely to be scaled back.
That would mean pulling back at least somewhat on its direct-to-consumer ambitions.
As at Nike, Canada Goose turned to direct-to-consumer sales to boost margins.
In February Wells Fargo analysts led by Ike Boruchow said that Canada Goose’s DTC strategy “needs to be re-evaluated.”
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