Dollar Tree Inc. is acquiring 99 Cents Only Store’s intellectual property in North America as its competitor goes out of business. The dollar store acquired the IP alongside the designation rights of 170 99 Cents Only stores in Arizona, California, Nevada and Texas.
The discount retailer said Thursday via email that the stores would be turned into Dollar Tree locations, but didn’t immediately respond to a request for comment about what it plans to do with 99 Cents Only’s intellectual property. The deal also included the acquisition of select furniture, fixtures and equipment.
“Dollar Tree looks forward to welcoming customers from 99 Cents Only Stores as early as fall 2024,” the company said in a Wednesday announcement.
The U.S. Bankruptcy Court for the District of Delaware approved the deal in May. California-based 99 Cents Only in April said it would close all of its 371 stores, began liquidating and subsequently filed for Chapter 11 bankruptcy. After 42 years in business, 99 Cents Only said the pandemic, inflation and changing consumer demand were key factors that made it untenable to stay in business.
"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,” Mike Creedon, Dollar Tree’s chief operating officer, said in a statement. Creedon said the 99 Cents Only portfolio complements the retailer’s current store footprint, “enabling us to rapidly grow the Dollar Tree brand across the western United States, reaching even more customers and communities.”
Earnest Analytics analysts earlier this year found Dollar Tree was likely to be one of the biggest beneficiaries of 99 Cents Only’s closure, as 77% of the bankrupt dollar store’s customers also shopped at Dollar Tree in the prior 12 months. Jefferies analysts likewise found Dollar Tree could benefit thanks to the sheer number of 99 Cents Only stores that had a Dollar Tree within 5 miles (99%).
Dollar Tree Inc.’s portfolio also includes Family Dollar. Overall, the company operated 16,774 stores under both banners in 48 states and Canada as of Feb. 3. But that footprint is expect to shrink. In March, Dollar Tree said it planned to close 600 Family Dollar stores in the first half of this year. An additional 370 Family Dollar stores and 30 Dollar Tree locations will close in the coming years as leases expire.
On Tuesday, Dollar Tree also confirmed to Retail Dive that an undisclosed number of people were laid off from its corporate office in Chesapeake, Virginia. The corporate staff downsizing is part of the company’s “store portfolio optimization,” a spokesperson told Retail Dive.
Other retailers are also picking up pieces of the 99 Cents Only store fleet. Closeout-focused Ollie’s Bargain Outlet announced last week that it won a bankruptcy bid for 11 former 99 Cents Only stores in Texas.
