Family Dollar lays off 135 in Matthews
04/02/2014 2:49 PM
04/03/2014 3:28 AM
Family Dollar, which has posted disappointing results so far in the lackluster economic recovery, is laying off 135 workers at its Matthews headquarters, a spokeswoman said Wednesday.
The cuts represent 6 percent of the company’s Matthews workforce.
“Family Dollar is taking decisive action to better position the company to succeed in an adverse operating environment,” said spokeswoman Bryn Winburn, in an emailed statement. The layoffs cover all divisions and operating levels of the company’s headquarters, or the “Store Support Center,” as Family Dollar calls it.
The job cuts follow a “comprehensive review,” Winburn said, and are meant to increase efficiency and improve the company’s financial performance. Winburn said the cuts are “difficult, but necessary.”
Family Dollar has lagged its chief competitors, such as Dollar General and Dollar Tree, in recent years.
In January, Family Dollar said its profits fell 3 percent in the quarter that ended Nov. 30. The company reported fewer customer transactions and a drop in the average transaction size.
Executives said then that the chain’s low-income customers were still feeling the effects of the lackluster economy, with wages largely stagnant and unemployment higher than the historical average. Family Dollar has said its core customer is typically a female head of household making less than $40,000 a year.
But at the same time, the chain’s larger rival, Tennessee-based Dollar General, has reported better results. Last month, Dollar General said its full-year profit was up 7.5 percent from 2012, rising to more than $1 billion.
Over the past five years, Dollar General’s profits have increased threefold. Family Dollar’s have increased only half that.
Several key Family Dollar executives have left, including Chief Operating Officer Michael Bloom, who resigned in January after customer traffic and profits fell during its most recent quarter.
At the time, Family Dollar chief executive Howard Levine said, “We weren’t happy with our financial results.”
Family Dollar’s stock fell 23 cents Wednesday and closed down less than 1 percent, at $57.72 a share. The company is set to report its fourth-quarter and full-year earnings next Thursday.
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