Three years after buying Family Dollar, Dollar Tree is closing the Matthews headquarters of the retail giant started by the Levine family, a move that will affect about 900 local jobs. Included in that figure are the roughly 200 jobs that will be eliminated as part of the move.
In a statement Tuesday, Dollar Tree, said it is offering about 700 Family Dollar employees the opportunity to relocate to its consolidated headquarters in Chesapeake, Va. The company said it will provide job transition benefits and outplacement services to the affected workers.
All Matthews employees were notified of the move in a town hall meeting Tuesday morning. Dollar Tree says the consolidation of its headquarters is expected to be completed by fall 2019.
The closure of the Family Dollar headquarters marks the end of another chapter for the formerly local retailer.
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Leon Levine, then 22 years old, opened the first Family Dollar store on Central Avenue in 1959 with only a $6,000 investment that represented all of his assets. Levine’s foray into retail came just a few years before the rapid growth of department stores and malls like SouthPark in the suburbs, which drew families and money away from city centers.
In that way, Levine filled the gaps in close-in neighborhoods, which were left with few shopping options, noted Tom Hanchett, a community historian in Charlotte.
“The late ‘50s and ‘60s were the era of mall building. Leon Levine was something of a contrarian to that. He did not go into the malls; he stayed in the neighborhoods,” Hanchett said. “He had brilliant foresight.”
The Levine family grew the dollar store into a coast-to-coast retail giant over the next several decades, expanding even during the recession.
Dollar Tree acquired Family Dollar in July 2015 for about $9.1 billion, a move that brought a fresh wave of uncertainty for employees at the Family Dollar headquarters in Matthews. At the time, Dollar Tree said it would maintain the local corporate offices.
In early 2016, Howard Levine, son of founder Leon Levine, stepped down as Family Dollar’s CEO, drawing to a close nearly five decades of family leadership at one of Charlotte’s best-known corporations.
“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,” said Gary Philbin, Dollar Tree’s CEO, in a statement.
“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.”
Analysts have long said that Dollar Tree could slash jobs at Family Dollar as a way of trimming costs. About a year after buying Family Dollar, Dollar Tree laid off about 370 Family Dollar corporate employees in Matthews as a way to eliminate redundancies in its support functions.
In a research note last week, CFRA Research analysts said they expect Dollar Tree to meet its synergy goals as it works to further integrate Family Dollar, and that its “ongoing efforts” will strengthen Family Dollar’s performance. Last month, Dollar Tree reported that sales at Family Dollar stores open at least a year were down 0.5 percent for the first six months of 2018.
Dollar Tree’s consolidation of its corporate functions comes as the retailer has expended its corporate offices in Virginia.
In August 2016, Dollar Tree said it was moving forward with a plan to develop 70 acres at its Chesapeake headquarters. The plan, first announced in 2013, was put on pause during the acquisition process. Dollar Tree said the additional space will allow it to expand by at least 100 new jobs a year over the next six years.
The new corporate offices include a 12-story, 510,000-square-foot office tower. When “fully operational,” Dollar Tree’s Chesapeake headquarters will have 1,900 employees, according to the Virginian-Pilot.
Dollar Tree spokesman Randy Guiler said the Family Dollar distribution center in Matthews is unaffected by the decision to close the Family Dollar headquarters in Matthews.
As of early August, Dollar Tree operated 8,261 Family Dollar stores in North America.
Charlotte’s dollar-store drama
Family Dollar has had its share of drama over the last few years.
Although the chain expanded and saw sales rise during and after the recession, its profit margins thinned, and Family Dollar was pressured to improve or consider selling itself to a rival.
In July 2014, Family Dollar agreed to sell itself for $8.5 billion to Dollar Tree, one of its two main rivals. But Tennessee-based Dollar General — previously the largest dollar store operator in the nation — soon stepped in with an unsolicited rival bid. When Family Dollar declined the offer, Dollar General made a hostile $9.1 billion bid to try to break up the Dollar Tree deal and acquire Family Dollar itself.
Family Dollar executives argued that federal regulators would be wary to approve a sale to Dollar General, which operates under a very similar business model to Family Dollar and owns thousands of locations that overlap with the Matthews retailer.
Activist investor Carl Icahn, who bought a major stake in Dollar Tree and pushed hard for the Dollar General deal, argued that former CEO Howard Levine was letting his family ties and desire to stay with the company cloud his judgment.
In January 2015, Family Dollar shareholders approved the deal to sell the company to Dollar Tree. The deal closed about six months later. As part of its integration plan, Dollar Tree closed and re-bannered a number of underperforming Family Dollar stores.
Also as part of the deal, for competitive reasons, federal regulators required Dollar Tree to sell 330 Family Dollar stores.
Sycamore Partners, the private equity firm that bought Belk in 2015, purchased the stores from Dollar Tree in order to start its own discount chain, Dollar Express. The new retailer quietly opened up a headquarters in a nondescript office park off Independence Boulevard in Charlotte.
Sycamore, however, never fully developed the Dollar Express chain, and ended up selling the hundreds of former Family Dollar stores to another familiar name — Dollar General.
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