Dollar Tree moves to 99 Cents Only stores – WSVN 7News | Miami News, Weather, Sports

New York (CNN) — Goodbye only 99 cents. Hello dollar tree.

Dollar Tree announced Wednesday that it has secured leases for 170 of its 99 Cents Only stores in Arizona, California, Nevada and Texas. Dollar Tree will reopen these stores starting this fall with its own branded products.

99 Cents Only filed for bankruptcy in April and closed all 370 locations.

The two chains are very different and the announcement is a sign of consolidation in the retail industry.

99 Cents Only was a regional chain that sold groceries. Dollar Tree, a national company with primarily suburban locations, primarily offers discretionary goods such as party favors and housewares. Dollar Tree was the last dollar store chain to sell everything for $1 before raising prices to $1.25 and higher in 2021.

Dollar Tree also owns Family Dollar, located primarily in cities. Family Dollar has underperformed Dollar Tree and other discount chains in recent years, closing 975 stores.

The acquisition of 99 Cents Only leases out of bankruptcy gives Dollar Tree a cheaper way to grow instead of building new stores and helps the Virginia-based chain expand its reach on the West Coast.

“Management believed these locations were fundamentally sound and relatively undersupplied, so they took advantage of competitive weakness,” Michael Montani, an analyst at Evercore IRI, wrote in a note to clients on Wednesday.

One challenge for Dollar Tree could be the size of 99 Cents Only stores.

99 Cents Only stores average about 20,000 square feet, more than double the size of a typical dollar store chain.

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