Dollar Tree Extends its Branches by Acquiring the Bankrupt “99 Cents Only”
What You Need To Know:
- ‘99 Cents Only’ filed for Chapter 11 Bankruptcy in April 2024.
- Dollar Tree will receive 170 stores, furniture, equipment, and intellectual property.
Why Did ’99 Cents Only’ Go Under?
- They couldn’t weather the storm that retail faced during COVID.
- They lacked the scale needed to negotiate better terms with their suppliers.
New Market Cap Rankings for the Industry:
Dollar General: $31.25 billion
Dollar Tree (includes Family Dollar): $24.66 billion
Five Below: $7.32 billion
Big Lots: $98.27 million
Dollar Tree’s market cap increased by 10% after the news was released. The actual transaction size has yet to be disclosed.
Industry Outlook: BOOMING
- There is a focus on catering to slightly higher-income, suburban households with storefronts like pOpshelf.
- Dollar General will open 1,100+ stores this year (800 DG, 300 pOpshelf).
- Most ‘dollar stores’ are located in Food Deserts, and I see a huge opportunity for them to capitalize on this pressing issue.