Discount retail giant Dollar Tree is taking advantage of the bankruptcy of one of its former competitors by leasing up nearly half of its former locations.
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Dollar Tree has picked up leases at 170 former 99 Cents Only Stores across Arizona, California, Nevada and Texas, the company announced Wednesday. As part of the deal, Dollar Tree gained intellectual property rights as well as some furniture and other materials, according to trade publication Store Brands.
99 Cents Only declared Chapter 11 bankruptcy last month, announcing it would close all 371 of its stores and liquidate the rest of its assets.
The former 99 Cents Only locations will reopen as Dollar Tree stores this fall, the company said in a release, adding that the new leases will help the Chesapeake, Virginia-based chain grow its Southwest presence.
“As we continue to execute on our accelerated growth strategy for the Dollar Tree brand, this was an attractive opportunity to secure leases in priority markets where we see strong profitable growth potential,” Dollar Tree Chief Operating Officer Michael Creedon said in the release.
The deal took place over two transactions in bankruptcy court. Terms were not disclosed.
Other discount stores have also swooped in to snag closed 99 Cents Only stores, including Ollie’s Bargain Market, which purchased 11 locations through a $14.6M deal in the same bankruptcy court, Store Brands reported.
California–based 99 Cents Only was a regional chain that sold groceries and other items at steep discounts prior to its closure. In the months leading up to its bankruptcy, it struggled with rising real estate costs and cash flow issues, Bisnow reported last month.
Dollar Tree itself has not been immune to economic headwinds facing dollar stores. The company announced a net loss of $1.7B in the first quarter and announced plans to close 600 of its Family Dollar brand stores and at least 400 others through the first half of this year.
Though it was among the last retailers in the discount space to actually sell items for $1 each, it raised the average item price to $1.25 in 2021.
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