Dollar Tree Acquires .99 Cents Only

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?

1. They couldn’t weather the storm that retail faced during COVID.
2. 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.