Family Dollar closing 30 stores across the Carolinas, including locations in the Triad
WINSTON-SALEM, N.C. — Family Dollar Stores Inc. is closing three Triad stores, including one in Winston-Salem, by Aug. 30 as part of shutting down 30 stores across the Carolinas in its latest restructuring phase, according to the Winston-Salem Journal.
Spokeswoman Bryn Winburn confirmed today the company is closing 19 stores in North Carolina and 11 in South Carolina.
It has 63 stores in the 14-county Triad region, including nine in Winston-Salem and Greensboro, and six in High Point. The other stores being closed are in Mebane and Walnut Cove.
In April, Family Dollar said that it would close 370 under-performing stores nationwide, as sales and profits fell. Family Dollar, whose president departed unexpectedly in January, has struggled to keep up with its rivals, especially Dollar General.
“Family Dollar is taking decisive action to position the company to be more successful in an adverse operating environment,” Winburn said.
“The company conducted a comprehensive business review to identify opportunities to provide customers with more value, increase operational efficiency and improve financial performance.
“As part of this review, Family Dollar identified 370 of 8,246 stores that do not meet our profitability requirements. As a result, we have decided to close these underperforming stores.”
Winburn said each store has between 8 and 10 employees. “We will do everything we can to reassign impacted team members to nearby stores,” Winburn said.
Activist hedge-fund investor Carl Icahn, a longtime corporate fighter, revealed in June he had bought a 9.4 percent stake in Family Dollar.
Icahn is demanding that Family Dollar’s board of directors put the company up for sale immediately, and that it provide him with three board representatives. He put his demands in a letter sent to the Matthews company’s top executive, Howard Levine. The company declared the letter in a regulatory filing.
Icahn repeated his claim that Family Dollar “has consistently underperformed its peers on most, if not all, operating metrics” and with its share price.
“We believe there would be significant interest from strategic and financial buyers who could recognize massive synergies from an acquisition of the company,” Icahn wrote. “It is clear that now is a perfect time to sell, given the advantageous stock market and interest rate environment.”
Icahn expressed confidence that “an overwhelming majority of the company’s shareholders would be in favor of a sale.” If the board declined his offer, Icahn said, he would submit a shareholder proposal with his board nominees.
On June 9, Family Dollar’s board approved a one-year shareholder rights plan, or poison pill, that would be triggered if any individual or group gained more than a 10 percent ownership stake. In that strategy, shareholders typically are given the chance to buy additional or new shares at bargain prices, thus diluting the potential acquirer’s stake.
Analysts have speculated that Family Dollar could be purchased by a private equity firm or by a rival such as Dollar General.
But a Dollar General takeover has been seen as increasingly unlikely since it is experiencing a top-level management change.