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Dollar Tree: Hundreds of Family Dollar workers are opting not to move from Matthews

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Family Dollar, the Panthers sale and changes in Atrium Health made huge economic changes to the Queen City.
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Family Dollar, the Panthers sale and changes in Atrium Health made huge economic changes to the Queen City.

Two months after announcing plans to close Family Dollar’s headquarters in Matthews, Dollar Tree executives said Thursday that most of the affected employees have declined offers to relocate to Virginia where their functions are being consolidated.

About 210 Family Dollar employees in Matthews have agreed to move to Dollar Tree’s headquarters in Chesapeake, Va., representing approximately 30 percent of the local workers who were offered to do so, Dollar Tree said in a securities filing.

Dollar Tree said it will need to hire to replace the nearly 500 who are opting not to relocate.

Dollar Tree, which bought Family Dollar in 2015, said in its latest earnings report that it spent $2.3 million in the third quarter on expenses related to the headquarters consolidation. Included in that figure are job transition and relocation costs, outplacement services and one-time severance benefits. In total, the company expects to pay $40 million to $49 million on consolidation-related costs.

“We have begun the important phase of consolidating our store support centers into our Chesapeake campus, which will improve our ability to support Family Dollar stores through enhanced collaboration, communication and teamwork,” Dollar Tree CEO Gary Philbin said in a statement.

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Dollar Tree announced plans in September to close the Family Dollar headquarters in Matthews and consolidate all corporate functions in Chesapeake. The move affects about 900 local jobs, including 200 that are being cut. Dollar Tree said it offered a relocation option to the remaining 700 employees.

In a Worker Adjustment and Retraining Notification Act notice filed a few days after the announcement, Dollar Tree said that cuts would begin Nov. 19, with the majority expected in June.

It’s unclear how many job cuts in Matthews have been made so far or what sort of positions are being eliminated. A Dollar Tree spokesman could not be reached for additional comment.

In Chesapeake, Dollar Tree’s headquarters are being expanded in a newly built 12-story, 510,000-square-foot office tower in the Summit Pointe complex, a mixed-use development that will include upscale apartments, restaurants and retail and office space, according to its website.

The new headquarters will have 1,900 employees once it’s fully operational, according to the Virginian-Pilot.

Philbin has said that the completion of the headquarters in Virginia will mark “the most important phase of the integration” for Dollar Tree and Family Dollar.

On Thursday, Dollar Tree, which reported earnings of $281.8 million and sales of $5.54 billion for the quarter, outlined other ways it’s working to integrate the two brands, including by converting Family Dollar stores to Dollar Trees, closing underperforming stores, opening new locations and renovating others.

Dollar Tree says it expects to accelerate the project by renovating at least 1,000 stores next year. Each renovation, intended to improve the experience for shoppers, costs between $100,000 and $150,000 and takes about two weeks, Chief Financial Officer Kevin Wampler said in a call with analysts Thursday.

Also during the call, Dollar Tree executives said they’re working to mitigate the impact of tariffs expected to hit in early 2019: About $200 billion in Chinese imports are expected to face additional tariffs of 25 percent, as part of the U.S.’s ongoing trade war with that country.

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Dollar Tree buys from about 24 countries, so its merchants are looking to buy goods from places other than China, the company said. Merchants will also work to negotiate prices and switch up product mixes to avoid passing higher costs along to Dollar Tree/Family Dollar shoppers, many of whom are on a tight budget, the company said.

“Where other brands have to raise prices ... our customers often don’t have to have that extra dollar. We just have to be better buyers,” Philbin said.

Katherine Peralta: 704-358-5079, @katieperalta
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