Two Discount Retailers Announce Abrupt Closure of 1,000 Stores

New York may soon say goodbye to two of its most popular dollar store chains following a shocking fourth-quarter loss.

Another Retailer Going Belly Up?

Those hoping to score a bargain may soon have to seek deals at another store. Dollar Tree, which also owns Family Dollar, said it intends to close roughly 1,000 stores due to declining revenue.

According to the Associated Press, the retailer will shutter about 600 Family Dollar stores by June and a subsequent 370 Family Dollar locations over the next few years, when their leases expire. In addition, 30 Dollar Trees will also close their doors forever.

Why Are They Closing?

The reason for the shocking closures is due to Dollar Tree's "botched" takeover of Family Dollar almost a decade ago.

Neil Saunders, managing director of GlobalData, said in a statement:

This dramatic cull is the coup de grace in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015.

The chain famously battled it out against Dollar General to acquire Family Dollar, but ultimately won the bidding war for an $8 billion price tag. Unfortunately, the chain has had difficulty absorbing Family Dollar into its portfolio. This has caused the company to take on a $950 million impairment, in addition to a $1.07 billion goodwill charge.

Closing these stores will cost the company an additional $594 million by the holiday season.

Because the dust has been unable to settle for almost 10 years, in addition to the new economic woes, Family Dollar is "still sifting through the mess it inherited and has not been able to completely turn around."

Read More: Sears Closes Last Remaining New York Area Store

That paired with the ongoing inflation crisis and changing consumer habits has left Dollar Tree very few options.

This is an especially bad sign for the retailer as consumers are flocking to dollar stores to save money by cutting spending. This means shoppers are spending less when they visit a dollar store, which is further cutting into the company's profits.

This has caused stocks to tumble, with shares already down by 14% by opening bell on Wednesday.

What Locations Will Close

Currently, there are over 8,000 Family Dollar stores nationwide and about 340 here in the Empire State. Dollar Tree has roughly 16,000 stores nationwide and about 670 in New York.

At the moment, a list of store closures has not been provided at this time. However, it's been confirmed that 12 percent of all Family Dollar stores are on the chopping block.

This story will be updated when that information becomes available. Here's hoping Central New York is largely spared from the closures.

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