Dollar Tree Has Averaged One New Store Opening Per Day By Repurposing This Real Estate
Dollar Tree's acquisition of the store leases of bankrupt retailers such as Party City and 99 Cents Only has accelerated new store openings for the discount retailer
Earlier this week Dollar Tree DLTR 0.00%↑ closed on the ~$1 BB sale of the Family Dollar chain.
Having now divested its Family Dollar division, Dollar Tree is pivoting to aggressive new store growth.
Such as the 400 new store openings that it has planned in 2025.
But while opening more than one new store per day on average may seem like an aggressive target for any retailer, Dollar Tree has an ace up its sleeve:
It acquired ~1/3 of the sites in one fell swoop.
In February 2025 Dollar Tree acquired the rights to 148 Party City store leases following the 2024 bankruptcy of the party supplies retailer.
Over the past several months Dollar Tree has opened new stores at many of these sites—in repurposed space formerly occupied by Party City.
How did Dollar Tree open this many new stores so quickly?
It helped that the Party City sites were “warm boxes”—or stores where a built-in discount customer base regularly shopped.
Plus few exterior improvements—other than new signage—were needed to rebrand the stores for Dollar Tree.
Dollar Tree did a minor refresh of the interiors, swapping out Party City’s cluttered aisles with a clean look accented by its distinctive green logo and basic cash wrap.
And in many cases Dollar Tree even hired former the same employees that had worked at the stores for Party City.
The result?
Dollar Tree opened over one hundred new stores in just a few months—or faster than it typically takes just for the Company to negotiate a new lease at a single site.
But while opening 150 new stores in just a few months may seem like a daunting task, Dollar Tree has experience in rapid new store conversions.
In 2024 Dollar Tree opened ~650 new stores—and many stores were repurposed at the same pace as the Party City conversions.
That is because Dollar Tree acquired ~170 store leases in the bankruptcy of discount retailer 99 Cents Only Stores at a bankruptcy auction in May 2024.
By June 2024 the bankruptcy court approved the sale and Dollar Tree instantly obtained possession of the sites and quickly set up shop in the real estate.
85 of the former 99 Cents Only locations were rebranded and opened as Dollar Tree stores within 3 months of the lease acquisitions.
The remaining 1/2 of acquired locations opened by the end of the year.
Dollar Tree found the 99 Cents Only real estate attractive for several reasons.
Despite its financial struggles, 99 Cents Only generated approximately $2.1 BB in revenue during 2023 and much of the store base was profitable on a ‘4 wall’ basis.
This allowed for Dollar Tree—which has a similar product offering and customer base—to capture a large portion of these lost sales.
In fact, Dollar Tree CEO Michael Creedon noted that the retailer moved quickly to rebrand the sites and open for business to not “let a customer forget about us.”
Creedon noted that the longer the stores were closed, the more opportunity customers had to change their shopping habits and go to other stores.
As a result, many of the former 99 Cents Only stores were re-opened in as little as 30-60 days—and all were open within 6 months of acquisition.
The 99 Cents Only sites also offered a unique real estate opportunity.
Likely nowhere else would Dollar Tree find hundreds of seasoned and “move-in-ready” retail sites that could be had without the delays and uncertainties that come from negotiating one-off leases with landlords.
Additionally, the 99 Cents Only stores were concentrated in just 4 states with ~70% of locations in California, a lucrative and high-barrier-to-entry market where Dollar Tree had been underpenetrated relative to its competitors.
To be sure, the 99 Cents Only real estate was not a perfect fit for Dollar Tree.
Most stores were sized between 10,000 and 25,000 square feet, significantly larger than the Dollar Tree prototype.
In fact Dollar Tree CEO Michael Creedon noted that “opening two 99 Cents Only stores or converting them is the equivalent of opening three Dollar Trees.”
The Party City lease acquisitions have provided Dollar Tree with a similar opportunity to meet a significant portion of its 2025 store opening plans.
Together the conversions of former 99 Cents Only and Party City stores have accounted for over 300 new Dollar Tree store openings—or roughly ~1/3 of Dollar Tree's new store growth in 2024 and 2025.
Which begs the question:
Is there another soon-to-be-bankrupt retailer that Dollar Tree can target for repurpose options to fill its new store pipeline in 2026?