UPDATE: JANUARY 8, 2019 ACTIVIST ATTEMPTING TO FORCE ADDITIONAL CHARGES AT DOLLAR TREE.
Starboard Value, an activist investor, has spent approximately $370 million in Dollar Tree with the specific plan of reconstituting Dollar Tree’s Board of Directors, move beyond “dollar” pricing to multi-priced products, and explore a restructuring or sale of the company’s Family Dollar business.
Chesapeake, Virginia-based Dollar Tree, a leading operator of discount variety stores, announced that it was closing its Family Dollar headquarters and support center in Matthews, North Carolina and laying off 900 workers. Approximately 200 positions will be permanently eliminated and the remaining 700 employees will be offered an opportunity to relocate 325 miles to Chesapeake, Virginia. In a company statement, the decision is part of the company’s “ continuing integration of Family Dollar's organization and support functions. “The Company plans to consolidate its store support centers in Matthews, North Carolina and Chesapeake, Virginia to Dollar Tree's newly-completed office tower in the Summit Pointe development in Chesapeake.”
Dollar Tree's Executive Chairman, Bob Sasser, noted, "Our new 12-story, 510,000 square foot office tower represents the anchor of a dynamic campus environment serving the needs of our associates. We are eager to welcome all associates relocating to the Chesapeake area to participate in, and benefit from, the Company's next phase of growth."
While Dollar Tree's Chief Executive Officer, Gary Philbin, added, “"Leadership from both banners has continued to work together to integrate our two organizations and invest in future growth. By bringing our teams together into one location, we will further improve our ability to support our stores more effectively through enhanced collaboration, communication and teamwork. The completion of our expanded headquarters in Virginia will facilitate the most important phase of the integration and we are excited about the opportunities ahead for the Dollar Tree and Family Dollar banners."
The red flags were flying and the handwriting was on the wall. First, in July 2015 when Dollar Tree acquired Family Dollar for $9.1 billion and started integrating operations to reduce redundant operations and cut costs.
Again in early 2016 when the son of the founder stepped down as Family Dollar’s CEO signaling a possible corporate realignment and the company laid off approximately 370 employees in its Mathews headquarters.
Again in August 2016 when Dollar Tree announced the development of its expanded corporate headquarters in the city of Chesapeake, Virginia, noting “Chesapeake will be our center of growth for services shared across the entire corporation.”
And, again in late 2018 when the new building was finished and it was time to consolidate operations and close the Mathews, North Carolina operation.
Are you wondering, Am I Next?