Family Dollar to Cut Jobs, Close About 370 Stores

[Pardus]

e fiscal third quarter. Family Dollar Stores Inc. currently has more than 8,100 stores in 46 states.

The job cuts and store closings are estimated to result in an approximately $85 million to $95 million restructuring charge during fiscal 2014's second half.

The Matthews, N.C., company also said it will slow new store openings beginning in fiscal 2015 to bolster its return on investment. It now anticipates opening 350 to 400 new stores. In fiscal 2014 it had about 525 new stores.

The announcement came as Family Dollar reported its profit and revenue declined in the fiscal second quarter, which was hampered by bad winter weather.

Chairman and CEO Howard Levine said in a statement that the poor weather led to numerous store closings, disrupted merchandise deliveries and higher-than-expected utility and store maintenance expenses.

The quarter that ended March 1 included the critical holiday shopping season, which Levine said was "challenged" because shoppers had tighter financial constraints and rivals were more promotional.

Family Dollar reported that its net income dropped to $90.9 million, or 80 cents per share, from $140.1 million, or $1.21 per share, a year earlier. Revenue fell to $2.72 billion from $2.89 billion. Analysts surveyed by FactSet expected earnings of 90 cents per share on revenue of $2.77 billion.

Last year's quarter included one extra week.

Family Dollar said it believes the bad winter weather hurt its earnings by at least 5 cents per share.

Sales at stores open at least a year, a key gauge of a retailer's health, declined 3.8 percent. This figure excludes results from stores recently opened or closed.

Levine said the company's quarterly performance was below its expectations and that it's started a review of the business to increase operational efficiencies and boost its financial performance. Levine said the price cuts, store closings and job eliminations are part of actions it is taking immediately to lift its performance during the review.

Looking ahead, Family Dollar anticipates third-quarter adjusted earnings of 85 cents to 95 cents per share. Fourth-quarter adjusted earnings are expected in a range of 75 cents to 85 cents per share. Fiscal 2014 adjusted earnings are predicted between $3.05 and $3.25 per share.

Wall Street is calling for third-quarter earnings of 98 cents per share, fourth-quarter earnings of 84 cents per share and full-year earnings of $3.38 per share.

Shares of Family Dollar rose 48 cents to $59.55 in morning trading Thursday.[/QUOTE]

 

[techs]

There's a dollar store around me having a going out of business sale. 25 percent off!

 

[OCGuy]

The quarter that ended March 1 included the critical holiday shopping season, which Levine said was "challenged" because shoppers had tighter financial constraints and rivals were more promotional.

Que? People had tight financial constraints, so they couldn't shop at the dollar store?

 

[Demo24]

Dollar General seems to be taking over, new ones keep popping up all over the place

 

[techs]

I'm waiting for the first 50 cent stores to open.

 

[BlitzPuppet]

Hope they close the one by my office ^_^

 

[DesiPower]

People are getting money conscious these days, they dont want to go to upscale stores like Family Dollar, they prefer WalMart.

 

[Jimzz]

Que? People had tight financial constraints, so they couldn't shop at the dollar store?

Family Dollar is not a dollar store. Its like a mini Wal-Mart or CVS without the drugs.

 

[Blackjack200]

People are getting money conscious these days, they dont want to go to upscale stores like Family Dollar, they prefer WalMart.

Actually I remember during the recession they were saying that Wal-Mart was losing business to dollar stores, maybe this is a sign that more people have re-elevated themselves to shopping at Wal-Mart.

What a fucking depressing thought.

 

[monkeydelmagico]

Doesn't suprise me. The stores are hit or miss. Some are run well while others are dirty poorly stocked holes

 

[OCGuy]

Family Dollar is not a dollar store. Its like a mini Wal-Mart or CVS without the drugs.

Ah OK, thanks for clarifying. You restored some of my faith in humanity.

 

[Newell Steamer]

Eh tok ur jerbs!!!

 

[IronWing]

Modern retailing in eleven easy steps:
1) Borrow money
2) Throw crap against the wall (open several test stores trying out different approaches)
3) See what sticks, close all the others
4) Borrow more money
5) Expand the winning brands as fast as possible
6) Borrow lots more money
7) Hyper-expansion phase with borrowed money
8) Go public, become a gazillionaire
9) Exhaust borrowing capacity, let public company go backrupt
10) Walk away with a gazillion dollars
11) Go to step 1

 

[mrjminer]

I find it pretty insane that these stores even stay in business. I guess that says something about the stupidity of the average consumer, or at least about how uninformed they can be.

At least in the few "Dollar Generals" I've been in to grab something quick, these "xxxxxxx Dollar/ xxxxxx Dollar Store / etc." operate purely through deception. Most things are marketed / designed to look identical to what you would find in a regular store, but have lower net weight (ie: less grams of whatever per dollar) and sold for the same price or lower, but in not close proportional to what you would get per dollar buying the "real size" package at a regular store.

This is even done with things like toothpaste, where you'll see shit like "3.4 oz" tubes instead of "4oz" tubes which then have identical packaging (box size, etc.) to what you would find in the regular store, but of course stating it has "3.4oz." So, unless you know what the "regular size" from a regular store would be, you would end up paying more for less just because it's packaged to be as deceptive as possible for someone that doesn't know how many ounces come in the "regular" versions you'd see in a grocery store. Same size box, different size contents kind of shit. Or, whatever it is they are selling is the shittiest possible rendition of the brand name is used then sold for as much for the higher quality rendition of the brand in a regular store. Maybe a few of their generics are reasonably priced or are a good bang for your buck, but from what I've seen, most of these stores carry almost entirely these alterations of name brand goods to screw people over that don't know any better or sell generic brands for the same prices as name brands in a regular store.

Too bad there's no law being broken for this that I'm aware of, because it's far lower on the "morals" scale than even a used car salesman filling every corruption stereotype IMO because they operate almost entirely on and are designed / marketed to suck away tax dollars through EBT. Can't say that I can blame them entirely (blame lies with EBT) since they are businesses, but it makes them a pretty repugnant subset of them in my mind.

Never should any of them have been capable of supporting more than zero locations with how they are run, at least in my opinion.

 

[poofyhairguy]

Meh, I like Family Dollar for some things. None of the food is edible, but some of their cleaning stuff is cheap.

 

[nageov3t]

People are getting money conscious these days, they dont want to go to upscale stores like Family Dollar, they prefer WalMart.

in fairness, you're probably getting more for your money at Walmart.

I was just reading an article that did comparisons on stuff like foil, soap, etc... item v item, the dollar stores tend to be cheaper, but they're also giving you a lot less (eg: a 14' roll of toil for $1 at the Dollar Store, vs a 75' roll for $4 at Walmart)

 

[OBLAMA2009]

what is family dollar, is that the same as dollar tree?

 

[Fingolfin269]

When Dollar General goes global, will Poundland be trouble next? Pound General has a nice ring to it I guess.

 

[natto fire]

I find it pretty insane that these stores even stay in business. I guess that says something about the stupidity of the average consumer, or at least about how uninformed they can be.

At least in the few "Dollar Generals" I've been in to grab something quick, these "xxxxxxx Dollar/ xxxxxx Dollar Store / etc." operate purely through deception. Most things are marketed / designed to look identical to what you would find in a regular store, but have lower net weight (ie: less grams of whatever per dollar) and sold for the same price or lower, but in not close proportional to what you would get per dollar buying the "real size" package at a regular store.

This is even done with things like toothpaste, where you'll see shit like "3.4 oz" tubes instead of "4oz" tubes which then have identical packaging (box size, etc.) to what you would find in the regular store, but of course stating it has "3.4oz." So, unless you know what the "regular size" from a regular store would be, you would end up paying more for less just because it's packaged to be as deceptive as possible for someone that doesn't know how many ounces come in the "regular" versions you'd see in a grocery store. Same size box, different size contents kind of shit. Or, whatever it is they are selling is the shittiest possible rendition of the brand name is used then sold for as much for the higher quality rendition of the brand in a regular store. Maybe a few of their generics are reasonably priced or are a good bang for your buck, but from what I've seen, most of these stores carry almost entirely these alterations of name brand goods to screw people over that don't know any better or sell generic brands for the same prices as name brands in a regular store.

Too bad there's no law being broken for this that I'm aware of, because it's far lower on the "morals" scale than even a used car salesman filling every corruption stereotype IMO because they operate almost entirely on and are designed / marketed to suck away tax dollars through EBT. Can't say that I can blame them entirely (blame lies with EBT) since they are businesses, but it makes them a pretty repugnant subset of them in my mind.

Never should any of them have been capable of supporting more than zero locations with how they are run, at least in my opinion.

That is the rub though, there is a huge set of this population, and as wealth is systematically concentrated, and the middle class is pushed below the poverty line these types of stores will continue to thrive.

While I have seen what you refer to in the deceptive packaging game, you fail to mention these stores have their own brands which actually stack up pretty well to the competition. I used to be a contractor for Dollar General, and the reason they are so competitive with places like Wal-Mart is their ridiculously low overhead. They set up their stores far enough away from Wal-Marts in tiny towns and can operate on as little as $1500 a day at some locations. They do the same thing as any other big corp in trying to keep mainly part time employees and make those employees do everything from run register, to janitorial duties.

There is a strange corporate mentality there for sure, especially in the remodels I was involved with, but your post misses the bigger picture by ranting about the not very common deceptive packaging, at least at Dollar Generals, and I have been to over 150 of them. When it should have been more towards IronWing's post where DG rose out of nothing (their hyper-expansion was largely funded by Citigroup) and suddenly has similar buying power to Wal-Mart and strongarms their suppliers the same way.

No surprise about Family dollar here. Every little cow town I went through while remodeling DGs had a Family Dollar and a Subway (sometimes those were the ONLY chains in the area) and when I did decide to go to the Family Dollar, due to the DG being closed for remodel, it was in much worse shape than the DG pre-remodel.

 

[AViking]

I forgot about these kinds of stores. They were opening up a dollar store or the equivalent on every corner in town before I left the states. When you factor in Walmart, K-mart, and all these other chains it seems to me that the market has to be oversaturated. The economy is bad but how can it warrant this many locations?! Family Dollar alone has 7000+ locations. It's nuts.

 

[Fingolfin269]

I forgot about these kinds of stores. They were opening up a dollar store or the equivalent on every corner in town before I left the states. When you factor in Walmart, K-mart, and all these other chains it seems to me that the market has to be oversaturated. The economy is bad but how can it warrant this many locations?! Family Dollar alone has 7000+ locations. It's nuts.

I'll do anything I can to avoid stepping into a Wal-Mart. Shopping experience at DG is much better. Granted there is much less variety but if you know what you're going for before making the trip it's fine.

 

[natto fire]

I forgot about these kinds of stores. They were opening up a dollar store or the equivalent on every corner in town before I left the states. When you factor in Walmart, K-mart, and all these other chains it seems to me that the market has to be oversaturated. The economy is bad but how can it warrant this many locations?! Family Dollar alone has 7000+ locations. It's nuts.

Read my post above. They set up shop far enough from those places (think towns with populations as low as 500 people) and have much lower overhead. I know Dollar General leases every property they run, and when they set up in strip malls, find the most distressed piece of junk property and negotiate a very low long term lease.

 

[techs]

I find that you can get little plastic crap that would cost 3.99 at Walmart for a buck at these dollar stores. For those kind of things the stores are great. I would never buy food or toiletries because I worry about things like lead, etc in the foreign made products.

These stores have their uses but 7000 of them in the chain listed? They expanded too fast and now that the novelty has worn off they are going to close stores until the find their appropriate level.

 

[CPA]

I don't know why anyone would waste time to make a seperate trip to a dollar store to get toilettries. I just get all of mine at Kroger when I go grocery shopping. A little more expensive, but worth eliminating extra trips.

 

[poofyhairguy]

what is family dollar, is that the same as dollar tree?

No, Dollar Tree is an "everything is a dollar" store. Family Dollars is what happens if you mix a Wal-Greens with a Wal-Mart and took out the pharmacy.