North American discount variety stores operator Dollar Tree is planning to close up to 390 Family Dollar stores this year.
In its full-year financial statement, the company said it is planning to obtain material rent concessions from landlords on underperforming stores and will close them if rejected.
As part of its store optimisation programme, the retailer is also planning to open 350 new Dollar Tree and 200 new Family Dollar stores this year.
At least 1,000 Family Dollar stores will be renovated, as well as rebranding an additional 200 Family Dollar stores to Dollar Tree stores.
Dollar Tree president and CEO Gary Philbin said: “We moved aggressively in the fourth quarter to optimise Family Dollar’s performance, including closing 84 stores and announcing plans to renovate at least 1,000 stores in 2019.
“The renovated stores will include new $1.00 Dollar Tree merchandise sections. Approximately 200 Family Dollar stores will be re-bannered to Dollar Tree, and we plan to close as many as 390 Family Dollar stores this year.
“We also recorded an inventory reserve in part because of the different inventory needs of this new optimised store base. Excluding this markdown and the non-cash goodwill impairment charge related to Family Dollar, the combined companies performed well in the quarter.”
The discount retailer also plans to add freezers and coolers in approximately 400 stores.
During the fourth quarter, the retailer opened 143 stores, expanded or relocated 14 stores, as well as closed 84 Family Dollar stores.