(Source – Yahoo Finance)
Retail closures can have a significant ripple effect on local economies, especially when key destination stores shut down. These closures can impact nearby businesses, as consumers often visit other stores, cafes, and service providers in the same shopping area. The failure of destination chains such as Christmas Tree Shops, Tuesday Morning, and Bed Bath & Beyond exemplifies this challenge, causing a loss not just in shopping options but in the anchor businesses that drive traffic to entire shopping plazas.
Impact of Retail Closures on Local Economies
When a major retailer closes, it affects more than just its direct customers. For instance, people who frequent chains like Five Below or Ulta Beauty might also visit nearby local businesses for a snack, a haircut, or a manicure. The loss of a key retailer can thus lead to a decline in foot traffic, making it harder for surrounding businesses to thrive. In an economic climate where costs for labor, rent, and borrowing have increased, it doesn’t take much to push many businesses into failure. Therefore, the closure of destination stores poses a significant threat to the health of local shopping plazas and the businesses that rely on them.
Dollar Tree acquires 99 cents: The recent failures of chains like Christmas Tree Shops, Tuesday Morning, and Bed Bath & Beyond are a case in point. These stores served as anchor businesses that attracted shoppers to various plazas. When such stores shut down, the impact ripples through the surrounding businesses, potentially leading to more closures and a downturn in local economic activity.
Dollar Tree Acquires 99 Cents Only Leases
In a turn of events that offers some relief, Dollar Tree has announced it will take over leases from the struggling 99 Cents Only Stores. This move comes after 99 Cents Only disclosed plans to close and liquidate nearly all of its 400 locations in a shocking announcement on April 4. Known for selling fresh produce and other goods not typically associated with traditional dollar stores, 99 Cents Only had developed a loyal customer base that was stunned by the news.
Dollar Tree acquires 99 cents: The liquidation process began almost immediately, with the company partnering with Hilco Global to handle the sale of all merchandise and certain store fixtures, furnishings, and equipment. These sales were slated to start on April 5, 2024, across all 371 of the company’s store locations. While the possibility of a buyer stepping in to purchase the brand remained, the company proceeded with its liquidation plans.
Fortunately, many of the former 99 Cents Only locations will remain as discount retailers, though the brand itself will not be preserved. Dollar Tree has acquired designation rights for 170 leases across Arizona, California, Nevada, and Texas. This acquisition, completed through two transactions approved by the United States Bankruptcy Court for the District of Delaware, also included the North American Intellectual Property of 99 Cents Only Stores and select on-site assets.
Ollie’s Bargain Outlet also struck a deal to acquire leases for 11 99 Cents Only Stores in Texas. Despite Dollar Tree not being as beloved as 99 Cents Only, this move ensures that customers in many markets will still have access to discount shopping options. Dollar Tree’s Chief Operating Officer, Michael Creedon, emphasized the strategic value of this acquisition, highlighting the potential for profitable growth and access to premium retail centers.
“As we continue to execute on our accelerated growth strategy for the Dollar Tree brand, Dollar Tree acquires 99 cents: this was an attractive opportunity to secure leases in priority markets where we see strong profitable growth potential,” said Creedon. “The portfolio complements our existing footprint and will provide us access to high-quality real estate assets in premium retail centers, enabling us to rapidly grow the Dollar Tree brand across the western United States, reaching even more customers and communities.”
This acquisition signals a proactive step by Dollar Tree to strengthen its market presence and continue serving the discount shopping needs of communities affected by the closure of 99 Cents Only Stores.
