By Chelsey Dulaney
Family Dollar Stores Inc., less than a week after gaining
shareholder approval to sell itself to Dollar Tree Inc., said
Monday its December sales improved as the discount retailer
benefited from fewer markdowns.
For the month ended Jan. 3, Family Dollar said its sales
increased 3.6% to $1.21 billion from a year earlier. Same-store
sales, which exclude newly opened stores, increased 1.2%, compared
with a 3% decline last December.
Family Dollar became the target of a prolonged takeover battle
last year after agreeing in July to be bought by Dollar Tree Inc.
in a deal now worth $8.7 billion. Dollar General Corp., which has
long eyed buying up its main competitor, swooped in weeks later
with a higher $9.1 billion all-cash offer. Dollar General
ultimately wasn't able to satisfy Family Dollar's concerns that
combining the two biggest dollar-store chains would face
significant antitrust hurdles.
After securing the blessing of proxy advisers Glass, Lewis &
Co. and Institutional Shareholder Services Inc., Family Dollar
shareholders overwhelmingly approved the deal with Dollar Tree on
Thursday.
The deal comes as Family Dollar has struggled in recent quarters
as its profit and margins have slipped, underscoring the importance
of a deal for the company. A plan to lower prices disappointed
customers, and its latest quarter's results were worse than
expected, in part because of distractions from the pending
merger.
Family Dollar said its December margins widened by 59 basis
points to 34.91% as the retailer benefited from fewer markdowns,
increased purchase markups and a smaller freight expense.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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