Family Dollar Biography
Family Dollar is an American variety store chain. With over 8,000 locations in all states except Alaska, Hawaii, Oregon and Washington, it is the second largest retailer of its type in the United States. Family Dollar was headquartered in Matthews, a suburb of Charlotte, North Carolina, until it was acquired by Dollar Tree and headquarters operations were moved to Chesapeake, Virginia.
In June 2014, activist investor and major shareholder Carl Icahn demanded that Family Dollar be immediately put up for sale.
On July 28, 2014, Dollar Tree announced that it would buy Family Dollar for $8.5 billion. The sale delivered a windfall to the company’s biggest shareholder Carl Icahn, who acquired his 9.4 percent stake in June 2014. On January 22, 2015, Family Dollar shareholders approved the Dollar Tree bid.
On March 6, 2019, the retailer announced that it will close up to 400 stores nationwide due to heavy pressure from an activist investor.
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Family Dollar was founded in 1959 by Leon Levine, a 21-year-old entrepreneur. In November of that year, the company’s first store was opened, in Charlotte, North Carolina. In 1961, their first store in South Carolina opened, followed by stores in Georgia and Virginia, which were opened in 1962 and 1965, respectively. During the 1960s, the store company was largely a southern United States operation. By 1969, there were fifty stores in Charlotte alone.
The 1970s were growing years for the store chain. In 1970, Family Dollar’s stock went public for the first time, at $14.50 per share. In 1971, the chain’s 100th store opened, followed by their 200th in 1974 and their 300th in 1978. Also in 1974, a distribution center was opened in Matthews, North Carolina. In 1979, Family Dollar stock began trading at the New York Stock Exchange.
In 1981, the chain’s 400th store was opened, followed by a 500th store in 1982 and a 700th in 1983. The 1980s saw expansion at a wider scale for the company, and by 1989, 1,500 stores were operating.
The 1990s saw the pace of expansion slow down compared to the 1980s, with 1,000 stores opened. The company opened distribution centers in West Memphis, Arkansas; Front Royal, Virginia and Duncan, Oklahoma. Since 2000, the pace of growth increased significantly, with the addition of about 3,500 new stores, and new distribution centers opening in Morehead, Kentucky; Maquoketa, Iowa; Odessa, Texas; Marianna, Florida; and Rome, New York.
In 2001, Family Dollar joined the S&P 500 stock market index. In 2002, the company joined the Fortune 500 list of largest publicly held companies.
When Leon Levine retired in 2003, his son Howard R. Levine succeeded him as Chairman and CEO, keeping this multibillion-dollar company in the family.
In March 2005, Family Dollar restated the company’s fiscal 2000 to fiscal 2004 earnings per share downward by 2 cents to 3 cents a year, to correct lease-accounting issues.
New Stores Opened
As of August 2011, there were 7,000 stores in 44 states. According to their website in 2005, Family Dollar opened 500 new stores, 350 more in 2006, and an additional 300 in 2007. According to the Company’s 2013 Corporate Profile in 2010, Family Dollar opened 200 new stores, 300 more in 2011, 475 in 2012, and an additional 500 in 2013. On October 3, 2012, Family Dollar said they will open 500 stores in 2013. The next day, Family Dollar partnered with Healthways. Family Dollar operates 11 distribution centers – the latest of which opened in St. George, Utah on October 16, 2013.
The dress code for employees is a red polo shirt. Employees who choose to wear jackets while working can wear any color they please. Many employees who have light pink jackets wear them while working.
In March 2011, Family Dollar rejected a takeover offer by Nelson Peltz’s Trian Fund Management reportedly between $55 and $60 a share.
On June 6, 2014, activist investor Carl Icahn disclosed that his firm, Icahn Enterprises, held a 9.4% stake in Family Dollar. On June 19, 2014, Icahn demanded in an open letter that Family Dollar be put up for sale immediately. Goldman Sachs and other analysts had identified a number of potential buyers. As of June 19, 2014, 22% of Family Dollar’s shares were controlled by activist investors.
On July 28, 2014, Dollar Tree announced that it would acquire Family Dollar for $74.50 per share, a deal valuing Family Dollar at $8.5 billion, and that Dollar Tree would also assume $1 billion in debt currently owed by Family Dollar, for a total of $9.5 billion. Dollar Tree CEO Bob Sasser said that Family Dollar CEO Howard R. Levine will remain with the company following the merger and will be appointed to Dollar Tree’s board of directors. Dollar General entered the bidding, shortly thereafter, surpassing Dollar Tree’s offer on August 18, 2014, $78.50 a share compared to Dollar Tree’s offer of $74.50 a share. The enterprise value of the Dollar General bid was $9.7 billion compared to that of Dollar Tree of $9.2 billion, while the quantum return to shareholders was varying as the stock and cash deal valuation was subjected to fluctuations of price of the competing bidders stock. On August 20, 2014, Family Dollar rejected the Dollar General bid, saying it was not a matter of price, but concerns over antitrust issues that had convinced the company and its advisers that the deal could not be concluded on the terms proposed. Days after, Dollar General CEO Rick Dreiling sent a letter to the Family Dollar board of directors claiming that Levine rejected merger requests to protect his job. Levine, in a statement, said the Family Dollar board had been analyzing potential antitrust issues that could arise from doing a deal with Dollar General since the start of the year, and that was the reason it was not accepting the Dollar General bid.
On January 22, 2015, Family Dollar shareholders approved the Dollar Tree bid.
Several stores were required to be sold as a condition of the sale. Sycamore Partners acquired the stores in 2014 under the corporate name Dollar Express. The stores continued to operate under the Family Dollar name. In 2017, Dollar General acquired Dollar Express and converted the stores.
As a result of Family Dollar’s sale to Dollar Tree, some Family Dollar stores have opened in the same plaza, and at times even next door, to Dollar Tree locations.