Losing $8 Billion In A Dollar Store
Money doesn't grow on Dollar Tree
“Between urine and filth we are born.” - Saint Augustine
Chicago Alderman Jeanette Taylor’s two daughters were robbed at gunpoint three times while they worked at Family Dollar.
What do you expect? It’s the South Side, but Taylor complains that the discount retailer never forged relationships with local authorities to improve security.
“They are the worst ever,” the 20th Ward alderman said, as quoted by the Chicago Tribune. “I wouldn’t trust them to serve me a fruit, a vegetable or nothing else because their stores are filthy.”
“Come into a store where there is trash everywhere,” she said. “A gentleman got killed in a dollar store around the street from my house, they opened the next day.”
Soaring health and building code violations prompted the city to impose a raft of restrictions on dollar stores – not just Family Dollar. Then things got worse for Family Dollar.
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In February 2024, the chain pleaded guilty to a criminal charge for holding food, drugs, medical devices and cosmetics in its rodent-infested warehouse in West Memphis, Ark.
The company agreed to pay a fine of nearly $42 million.
“It is incomprehensible that Family Dollar knew about the rodent and pest issues at its distribution center in Arkansas but continued to ship products that were unsafe and insanitary,” said U.S. Attorney Jonathan D. Ross for the Eastern District of Arkansas.
It wasn’t the company’s first brush with regulators. In 2023, the chain agreed to settle with the U.S. Department of Labor to address “blocked exits, access to fire extinguishers and electrical panels, and improper material storage at stores nationwide.”
It is difficult to imagine now, but 10 years ago, Dollar General and Dollar Tree were competing to buy this disgusting retailer.
Dollar Tree, which runs 16,500 stores in 48 states and five Canadian provinces, won the dubious prize – paying a staggering $9 billion. Now it’s dumping the chain for $1 billion to a couple bottom-feeding private equity firms.
“This is a major milestone in our multi-year transformation journey to help us fully achieve our potential,” Dollar Tree CEO Mike Creedon explained in a recent press release.
Transformation is exactly what the company promised its investors when it bought Family Dollar 10 years ago. “This is a transformational opportunity for our business,” said CEO Bob Sasser in a 2015 press release.
Same word. Different CEO. The company has actually had four CEOs in the past eight years, changing them faster than their rat traps.
Together they transformed $9 billion into $1 billion.
[[[Thanks, Richard, for spotting this blunder. I love it when loyal readers suggest billion-dollar blunders. - Al]]]
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