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Dollar Tree leased 170 store locations from insolvent 99 Cents Only in four states - Arizona, California, Nevada, and Texas - according to the company's announcement on Wednesday, May 29. Starting in the autumn, Dollar Tree will reopen these shops under its own brand, selling its own merchandise.

Dollar Tree Expanding Its Footprint on the West Coast

Dollar Tree is a nationwide chain that mostly sells non-essential items like home decor and party supplies at its predominantly suburban stores, according to CNN. Before increasing pricing to $1.25 and beyond in 2021, Dollar Tree was the last dollar store chain to offer everything for $1.

As an alternative to constructing new shops, Dollar Tree was able to expand its footprint on the West Coast via the purchase of 99 Cents Only leases that emerged from bankruptcy. In a statement, Chief Operating Officer Michael Creedon Jr. said the property gives them access to high-quality real estate assets in premium retail locations, allowing them to reach more consumers and communities.

Michael Montani, an analyst at investment banking advisory firm Evercore ISI, told CNN that the Dollar Tree management team saw an opportunity to capitalize on their competitors' weaknesses since these sites are both inherently strong and relatively in short supply.

Meanwhile, what might be hard for Dollar Tree is that 99 Cents Only stores are pretty big. The average size of a 99 Cents Only store is around 20,000 square feet, which is twice as big as a regular dollar store.

99 Cents Only Recently Announced Bankruptcy

The 99 Cents Only is one of the biggest bargain retail chains in the United States. But in April, it announced its bankruptcy and shuttered all 371 stores due to financial difficulties.

Shoppers looking for a deal have long turned to The 99 Cents Only, where they can find a wide variety of products from basic foods to necessities for the home, many of which are priced at 99 cents or less.