8/28/2023 0 Comments Fix a flat dollar general![]() Since Dollar Tree is the best-run store, its stock also exceeded the performance of its rivals by nearly two-to-one. But now the weight of carrying Family Dollar has dragged margins down to where they're comparable with Dollar General. Of the three chains, Dollar Tree also had by far the best operating margins. That upended what until then was a very sleek business model, one which consumers responded to because it more effectively allowed them to budget their trips to the store. ![]() Although the acquisition tripled the number of stores Dollar Tree operated, putting it ahead of Dollar General, it also made Family Dollar's multiple-price-point business model the dominant one, since Family Dollar was bringing in more stores than what Dollar Tree owned. ![]() Ruining a good thingĪs I saw it, it was never a good idea for Dollar Tree to buy Family Dollar. While he preferred Dollar General (NYSE: DG) be the acquirer, once the two chains got into a bidding war, Icahn bailed on Family Dollar and sold his entire stake, reportedly making a $200 million profit. That would be an ironic twist, since it was Icahn who pushed Family Dollar to sell itself at the time. Now billionaire investor Carl Icahn has reportedly taken a large stake in Dollar Tree, and though it's unknown what plans (if any) he has in mind, speculation is that he might seek to have Dollar Tree undo its Family Dollar acquisition.
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