Deal$, Deal$, Deal$
By George Anderson
Supervalu is getting out of the standalone dollar store game and Dollar Tree is more committed to it than ever.
Yesterday, the wholesaler and retail grocer announced it had reached a deal to sell its Deal$ dollar store chain to Dollar Tree for $30.5 million in cash plus an undetermined amount of inventory. The chain has 138 stores in 16 states.
In its fourth quarter conference call, Dollar Tree’s president and chief executive officer Bob Sasser said, “Deal$ is a strong and recognized brand in its market. We intend to keep the name on the stores, leverage the best of what they’re currently doing while leveraging the Dollar Tree infrastructure for improved efficiency.”
“Furthermore,” he added, “the Deal$ acquisition includes a number of combo stores that offer an expanded assortment of merchandise, including items selling for more than a dollar. We plan to continue what’s been started there using the Deal$ stores to test new assortments and price points without disrupting our focus on Dollar Tree stores.”
Mr. Sasser said the acquisition brings with it an “experienced store and field management team” that he believes “will be able to integrate efficiently and really hit the ground running. We have existing logistics capacity to efficiently serve these stores with no additional capital expenditure.”
Moderator’s Comment: Firstly, what is your reaction to this deal and, secondly, how do you assess the current state of the dollar store market?
George Anderson – Moderator
- Supervalu Announces Its Plan to Sell Deal$
Stores – Supervalu Inc./Business Wire
- Excerpts From Dollar Tree 4Q Earnings Conference Call – Dow Jones Newswires/The Wall
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