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Drink Up: Dollar Tree Selling Cheap Booze

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Dollar Tree Inc. (DLTR) plans to sell alcoholic drinks at about 1,000 Family Dollar stores to increase sales. The company also intends to expand freezers and coolers at about 400 stores in fiscal 2019.

Dollar Tree had announced plans to close up to 390 Family Dollar stores in fiscal 2019 for poor performance. Approximately 200 Family Dollars will be re-branded as Dollar Tree.

During the recent first quarter, alcoholic drinks were added to about 45 stores, while freezers and coolers were expanded to about 55 stores.

Dollar Tree had acquired Family Dollar in 2015, but the acquisition severely hurt the company's finances.

Earlier this year, activist investor and Dollar Tree shareholder Starboard Value LP noted in a letter to the company that Dollar Tree's inability to execute a turnaround at Family Dollar has weighed heavily on the company's stock and resulted in the low valuation levels.

Starboard urged Dollar Tree to explore all strategic alternatives for Family Dollar, including sale of the business.

Dollar Tree also announced Thursday that it is launching the introduction of Dollar Tree Plus! multi-price point products into select test stores.

"This carefully considered test, leveraging the merchandising strength and purchasing power of Family Dollar, is designed to understand how Dollar Tree's deeply-loyal customers respond to the addition of merchandise at values greater than $1," Dollar Tree said.

The company is in the process of expanding this test to more than 100 Dollar Tree stores.

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