Dollar Tree Family Dollar

Dollar Tree to Acquire Family Dollar Stores


Dollar Tree, the operator of discount variety stores selling everything for $1 or less, and Family Dollar Stores, a national discount retailer offering name brands and quality, private brand merchandise, today announced that they have entered into a definitive merger agreement under which Dollar Tree will acquire Family Dollar in a cash and stock transaction. The value of the consideration is $74.50 per share, a 22.8% premium over Family Dollar’s closing price as of July 25, 2014.

The transaction, which has been unanimously approved by the Boards of Directors of both companies, is expected to close by early 2015, at which time the Family Dollar shareholders will receive $59.60 in cash and $14.90 equivalent in Dollar Tree shares, subject to the collar described below. At closing, Family Dollar shareholders will own no less than 12.7% and no more than 15.1% of the outstanding common stock of Dollar Tree. Howard R. Levine and Trian Fund Management, L.P. and funds managed by it, which collectively own approximately 16% of the outstanding stock of Family Dollar, have entered into voting agreements in support of the merger.

“This is a transformational opportunity,” stated Bob Sasser, Dollar Tree’s Chief Executive Officer. “With the acquisition of Family Dollar Stores, Dollar Tree will become a leading discount retailer in North America, with over 13,000 stores in 48 states and five Canadian Provinces, sales of over $18 billion, and more than 145,000 associates on our team. We will continue to operate under the Dollar Tree, Deals, and Dollar Tree Canada brands, and when this transaction is complete, we will operate under the Family Dollar brand as well. Throughout our history, we have strived continuously to evolve and improve our business. This acquisition, which enhances our footprint and diversifies our company, will enable us to build on that progression, and importantly, positions Dollar Tree for accelerated growth. By offering both fixed-price and multi-price point formats and an even broader, more compelling merchandise assortment, we will be able to provide even greater value and choice to a wider array of customers.

Dollar Tree has a long record of consistent, profitable growth, strong financial performance, prudent capital management, and outstanding total shareholder returns. The acquisition of Family Dollar is consistent with our vision to be the leader in value retailing.”

Sasser added, “This acquisition will extend our reach to lower-income customers and strengthen and diversify our store footprint. We plan to leverage best practices across both organizations to deliver significant synergies, while we accelerate and augment Family Dollar’s recently introduced strategic initiatives. Combined, our growth potential is enhanced with improved opportunities to increase the productivity of the stores and to open more stores across multiple banners.”

“I have long admired the Family Dollar brand and its key position in the minds of the consumer,” said Sasser. “We are excited about the prospects for the combined company and the many opportunities that it will create for our associates, vendors, business partners, and shareholders. Howard Levine, CEO of Family Dollar, will remain with the company and report directly to me. Upon closing, Howard will become a member of the Dollar Tree Board of Directors. We are excited to welcome the Family Dollar team to Dollar Tree, and we look forward to working together to deliver increased value to the consumer and to our shareholders.”


Howard R. Levine, Chairman and CEO of Family Dollar, commented: “For more than 54 years, Family Dollar has provided value and convenience to customers. Dollar Tree also has a rich history of providing great value to customers, and together, as one company, we can provide more customers with even greater value and convenience. Today’s announcement represents the successful culmination of a comprehensive strategic review process that our Board of Directors, working with its financial and legal advisors, began this past winter. While this assessment of alternatives included consideration of a number of potential partners, we are pleased to conclude this process with the announcement of this compelling transaction with Dollar Tree, which our Board has unanimously determined to be in the best interests of our shareholders. This combination will enable Family Dollar to accelerate efforts to improve the business and will benefit our dedicated Team Members who will now be part of a larger, more diverse organization. I am excited about our future with Dollar Tree, and I look forward to working with the Dollar Tree team to complete the combination as quickly as possible to realize the compelling benefits for all our stakeholders.”

Compelling Strategic Rationale

  • Creates a leading discount retailer in North America. The transaction will create a leading discount retailer in North America based on number of store locations, operating more than 13,000 stores in 48 states and five Canadian provinces, with sales exceeding $18 billion and over 145,000 associates.
  • Complementary business model across fixed- and multi-price point. Dollar Tree is the nation’s leading operator of fixed-price point stores, selling everything for $1 or less, and Family Dollar is a leading national operator of multi-price point stores providing value-conscious consumers with a selection of competitively priced merchandise in convenient neighborhood stores. Dollar Tree intends to retain and to grow each of its brands and the Family Dollar brand going forward and will optimize the combined real estate portfolio.
  • Targets broader range of customers and geographies. Dollar Tree targets customers within a broad range of Middle America with stores located primarily in suburban areas and Family Dollar targets low- and lower-middle income households through its urban and rural locations. The transaction will enable Dollar Tree to serve a broader range of customers and deliver even greater value to them.
  • Leverages complementary merchandise expertise. Dollar Tree’s assortment consists of a balance between consumable merchandise and variety/seasonal merchandise. Family Dollar’s assortment consists primarily of consumable merchandise and home products. The complementary assortments will enable the Dollar Tree and Family Dollar brands to expand category offerings and to deliver a broader, more compelling assortment to all customers.
  • Generates significant synergy opportunities. Dollar Tree expects to generate significant efficiencies in sourcing and procurement, SG&A leverage, distribution and logistics efficiency, and through format optimization. Dollar Tree anticipates that the transaction will result in an estimated $300 million of annual run-rate synergies to be fully realized by the end of the third year post-closing.
  • Enhanced financial performance and improved growth prospects. The transactionis estimated to be accretive to cash EPS within the first year post-closing, excluding one-time costs to achieve synergies.Dollar Tree will be better positioned to invest in existing and new markets and channels and to grow its store base across multiple brands. The combined company expects to generate significant free cash flow, enabling it to pay down debt rapidly.

Transaction Details
Under the terms of the transaction, Family Dollar shareholders will receive $74.50 for each share they own, comprised of $59.60 in cash and $14.90 in Dollar Tree stock. The stock portion will be subject to a collar such that Family Dollar shareholders will receive 0.2484 Dollar Tree shares if the average Dollar Tree trading price during a specified period preceding closing is equal to or greater than $59.98 and 0.3036 Dollar Tree shares if this average trading price is less than or equal to $49.08. If the average trading price of Dollar Tree stock during this period is between $49.08 and $59.98, Family Dollar shareholders will receive a number of shares between 0.2484 and 0.3036 equal to $14.90 in value. The transaction values Family Dollar at an enterprise value of approximately $9.2 billion, and it represents an enterprise value to last twelve months May 31, 2014 EBITDA multiple of 11.3x.

Dollar Tree intends to finance the acquisition through a combination of existing cash on hand, bank debt and bonds. Following the transaction, Dollar Tree expects to continue to have a solid balance sheet supported by strong free cash flow of the combined business. In connection with the transaction, Dollar Tree has received a financing commitment from JPMorgan Chase Bank, N.A. with the bank debt syndication and bond offering expected to occur prior to closing.

The transaction is subject to Family Dollar stockholder approval, expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

J.P. Morgan Securities LLC acted as exclusive financial advisor to the board of directors of Dollar Tree, and J.P. Morgan Chase Bank, N.A. committed to provide bridge financing for the transaction. Wachtell, Lipton, Rosen & Katz and Williams Mullen acted as legal counsel to Dollar Tree in connection with the transaction. Morgan Stanley & Co. LLC acted as exclusive financial advisor to the board of directors of Family Dollar in connection with the transaction. Cleary Gottlieb Steen & Hamilton LLP acted as legal counsel to Family Dollar in connection with the transaction.

Family Dollar

Family Dollar Names Tammy DeBoer, SVP – Food

\"\"Discount retailer Family Dollar today announced the promotion of Tammy L. DeBoer to the position of Senior Vice President – Food. Ms. DeBoer will report to Paul White, Executive Vice President – Chief Merchandising Officer.

\”Providing customers with a compelling food assortment is key to driving trips and an important initiative for Family Dollar,” said Mr. White. “Tammy’s proven track record in the food industry and her strategic leadership will help drive further enhancements to our assortment and help us increase customer loyalty as we work to continue to expand our market share.”

Since joining Family Dollar in June 2012, Ms. DeBoer has led the retailer’s Private Brand efforts with a strong focus on improving quality and expanding the assortment. Prior to joining Family Dollar, Ms. DeBoer served as Vice President, General Manager, for Bloom, a Delhaize America Company. Ms. DeBoer holds a Bachelor of Technology degree from Appalachian State University.

Family Dollar Wallace Church

Engaging the New “Value Shopper”

\"\"In last week’s Shopper Marketing Expo held October 16-18 in Chicago keynote speakers Wendy Leibmann CEO WSL Strategic Retail, and Mike Bloom, COO of Family Dollar shared the podium to discuss the changing value-driven consumer and how Family Dollar is responding to this ever-growing segment.

Wendy’s research shows that 75% of consumers believe that the recession will last for 3 more years. Virtually half say that they only have enough money for the basics and the remainder can afford the basics plus “a little bit more”. 75% of consumers state that the lowest price is the one driver in their purchase decisions, and more than two-thirds report that before they buy anything- they ask, “is this a smart use of my money?”  Consumers now study the value of every item she buys.

As a result, the discount retail channel is dramatically expanding. Once a “destination for the destitute”, now 58% of all consumers shop at a dollar store regularly, with 46% of these consumers having incomes of $100k or more.

Recent research from Kantar Media TGI, as reported in Marketing Week’s “Lower-income consumers snap up big brands”, adds some insight to these findings. It indicates that cultural capital, a person\’s level of education or knowledge, may be driving consumer\’s price orientation and purchase behavior. Consumers with high cultural capital understand the differences – or lack thereof – between brands and a retailers\’ Private Brand. Thus, this segment of value-shoppers are more price-driven which, combined with the current economic condition, creates an opportunity for retailers like Family Dollar to target a new type of consumer.

With this in mind, Mike Bloom outlined how Family Dollar has dedicated the last 12 months to transforming its product mix, launching new Private Brands, redesigning and refurbishing their stores and driving Everyday Value Pricing strategy, all of which ladder up to the goal of making Family Dollar more relevant to these consumers.

A key to Family Dollar’s success has been retaining their core customers (female HH with less than $40k income) while attracting a younger and more affluent segment which Mike calls “Trade In Customers”, those with $40 to 70k of annual income. Family Dollar has seen nearly double-digit growth in this segment all income levels.

Research showed that the average spend per trip has remained relatively unchanged for many years. Therefore, Family Dollar’s strategy was to increase the number of trips by revamping their assortment to include significantly more consumables including food, beverage, personal care, etc. On average consumers make 114 trips for food per year, but Family Dollar was only getting 6 of those trips.  Family Dollar expanded its food and beverage assortment by more than 1,000 SKUs and its HBA offerings by 1,600 SKUs. An intelligent mix of traditional CPGs and Private Brands, Family Dollar’s assortment is now as competitive as any other retailer.

While consumables drive trips, margins on these items are much less than Family Dollar’s core SKUs, and so Mike also drove the development of the retailer’s higher margin Private Brands.  Within the last year they’ve launched over 400 new Private Brand products with more than 500 new products planned. Many of these new products are tiered across a good/better best pricing strategy. These include the entry basic tier brand “Value Option”, the NBE health & wellness brand “Family Solutions” brand and their highly successful NBE consumables brand “Family Gourmet”, all recently redesigned by branding agency Wallace Church. Driven by these successes, Family Dollar is committed to carrying 2,000 Private Brand products by 2015.

In addition to expanding Family Dollar’s Private Brand portfolio, Mike and his team have greatly improved the in-store experience. Prior stores were so dirty, poorly lit and disorganized that the products were often perceived as diverted goods. Now the retail brand has lost its “cheap” stigma and Family Dollar has become a destination for value, quality, convenience and relevance.

Mike ended his talk with the statistic that only 52% of CPG marketers think of dollar stores as a strategic channel, but with a 64% anticipated growth in sales, the dollar channel is actually a true contender and strong advocate of Private Brands that solve for the needs of value focused customers.

Rob Wallace, Managing Partner, Wallace Church Inc.
Elizabeth Minton, New Business Coordinator,
Wallace Church Inc.

Family Dollar

Family Dollar Appoints New CMO

\"\"Matthews, North Carolina based discount retailer Family Dollar announced today the appointment of Jocelyn Wong as its chief marketing officer.

Wong, who will also serve as senior vice president, was most recently a group vice president of shopper marketing for the Pleasanton California based grocer Safeway. Safeway recently launched a customer loyalty program that offers personalized discounts based on past purchases.

Wong began her career with Proctor and Gamble where she held various roles including associate marketing director, NA Oral Care. Most recently she served as group VP shopper marketing for Safeway, where she led the creation of a newly formed shopper marketing organization. Wong holds a Bachelor of Science degree in chemical engineering and Biochemistry from Purdue University.

“Effectively communicating our everyday value pricing to our customer is critical to driving trips and reinforcing our brand to grow our market share,” said Mr. Bloom. “In a highly competitive retail environment, Jocelyn brings the experience and strategic vision we need to drive innovation in how we communicate to our customer to differentiate our brand and improve customer loyalty through our circulars and in-store experience.”

Wong will report to Family Dollar Stores Inc. President and Chief Operating Officer Michael Bloom.

It should be interesting to see how her Safeway and P&G experience come into play as she works with Tammy Deboer and the Family Dollar team on communicating the value and advantage of their Private Brand portfolio to customers.

2012 Family Dollar Marketing Management Inc (MMI)

PB CAREERS: Private Brand Project Coordinator – MMI/Family Dollar

\"\"Location:Family Dollar Offices – Matthews, NC

Position Summary:
Project Coordinators facilitate the Private Brands process in the development of packaging design. The role collaborates closely with Merchandising Business Teams, Quality Assurance, Global Sourcing, Suppliers and Service providers.  Core activities encompass the establishment, management and resolution of Private Brands program/item projects including initiating, gathering information, proofing and tracking programs/items through the branding, artwork, sourcing, quality assurance and implementation process.

Position Responsibilities:

  • Supervise Private Brand’s programs/items from inception through completion through Family Dollar’s workflow tool.
  • Maintain project timeline updates and track deadlines.
  • Coordinate, gather and communicate item/program details to all designated parties.
  • Manage approval process for individual item artwork, contributing to the creative design process as appropriate.
  • Collaborate with Merchandising Teams, Suppliers, Global Sourcing, Service Providers and Quality Assurance to execute product projects within designated Private Brand’s policies.
  • Effectively utilize data sources and tools to create reports as requested including routine reporting and ad-hoc status tracking.
  • Determine and review product communications for items in packaging development.
  • Maintain data integrity initiatives, including validation of on-package information and correct reflection in Family Dollar’s IT systems.
  • Clearly communicate issues, problem-solve and reach resolution.
  • Collect brand/item product information for comparative brand communication development.
  • Monitor, collect and maintain supplier artwork agreements, sample collection, die lines, cost acknowledgements and final artwork files.
  • Proof packaging copy and graphics, and communicate corrective actions.
  • Demonstrate good graphics judgment and give guidance to pre-production agencies on translating style guides in individual packaging art.
  • Provide follow-up on all associated activities to make sure tasks are completed on time.
  • Lead efforts to develop products comps for visual presentations.
  • Other duties and responsibilities as assigned.

Essential Skills and Experience:

  • BS/BA strongly preferred.  Equivalent work experience considered.
  • Minimum of 2 years’ experience in consumer retail, packaged goods, Buying, Private Label, Project Management, or graphic design.
  • Intermediate to advanced working knowledge of Microsoft Office desktop applications, inclusive of Excel, Word, PowerPoint and Outlook.  Graphic development experience a plus.
  • Effective oral and written communication, including interaction with merchants, quality assurance, global sourcing and other internal and external partners
  • Trouble shooting and problem solving
  • Multi-tasking and prioritization
  • Attention to detail and accuracy
  • Strong sense of urgency
  • Strong relationship building and intra/inter-departmental collaboration skills

Nonessential Skills and Experience:

  • Ideal candidates will have graphic design background, including the ability to sketch product layouts
  • Understanding of the product development life cycle from both a merchandising and manufacturer\’s perspective desired but not mandatory

Reporting to this Position: N/A

Physical Demands and Work Environment:  The physical demands and work environment characteristics described here are representative of those that must be met by an employee to successfully perform the essential functions of this job.  Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.

  • Physical Demands:  Constant amounts of repetitive hand motions and sitting; routine walking and standing; requires lifting and carrying 15-20 pounds.
  • Work Environment:  It is enclosed in an office facility that maintains normal temperatures.  Noise level is at a minimum.

To apply contact: Pat Abbey – VP, Human Resources, MMI