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Philbin named president, COO of Family Dollar

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CHESAPEAKE, Va. — Dollar Tree Inc. has announced that it has completed its acquisition of Family Dollar Stores Inc., and has named Gary Philbin president and chief operating officer of the Family Dollar division.

Dollar Tree Inc. has announced that it has completed its acquisition of Family Dollar Stores Inc., and has named Gary Philbin president and chief operating officer of the Family Dollar division.

Howard Levine, Family Dollar’s chief executive officer, has been appointed to Dollar Tree’s board of directors, effective immediately.

"We are pleased to announce we have completed our acquisition of Family Dollar, and we formally welcome the Family Dollar team to the Dollar Tree organization," Dollar Tree CEO Bob Sasser said on Monday. "This is a transformational opportunity for our business to offer broader, more compelling merchandise assortments, with greater values, to a wider array of customers.

"This acquisition will extend our reach to low-income customers, while strengthening and diversifying our footprint. We plan to leverage best practices across both organizations to deliver significant cost synergies. Combined, our growth potential is enhanced, with improved opportunities to increase store productivity and to open more stores across multiple banners."

In his new role as president of COO of Family Dollar, Philbin, 58, will continue to report to Sasser. Philbin joined Dollar Tree as senior vice president of stores in December 2001, and he was promoted to COO in March 2007 and to president in June 2013. Prior to joining Dollar Tree, Philbin held senior-level positions in both merchandising and operations during his 30 years in the retail grocery industry.

"Gary has played an integral role in the success of Dollar Tree over the past 14 years," Sasser said. "Notably, he was instrumental in improving the Dollar Tree customer shopping experience and the related customer satisfaction, as well as leading the integration following our Canadian acquisition in 2010."

Philbin said he is pleased to have the opportunity to lead the Family Dollar team.

"Throughout the due diligence and integration planning processes, I have been impressed with the experience, talent and dedication of the Family Dollar team members," Philbin said. "Our focus as an organization will be on the customer — by consistently providing great values, affordable prices, and relevant items in a store environment that is convenient, clean, reliable and efficient. We are well prepared for the integration process, which is now under way."

Dollar Tree has outlined the strategic rationale for its acquisition of Family Dollar. The company says the now completed deal will:

• Create one of North America’s leading discount retailers, with more than 13,000 stores in 48 states and five Canadian provinces, and annual sales of more than $19 billion.
• Leverage complementary business models. Dollar Tree is the nation’s leading operator of fixed-price-point stores, selling everything for $1 or less, and Family Dollar is a leading national operator of multi-price-point stores, providing value-conscious consumers with a selection of competitively priced merchandise in convenient neighborhood stores.
• Target a broader range of customers and geographies. Dollar Tree reaches a broad range of shoppers with stores located primarily in suburban areas, while Family Dollar targets low- and lower-middle-income households with its urban and rural locations. The transaction enables Dollar Tree to serve a broader range of customers and deliver even greater value to them.
• Leverage complementary merchandise expertise. Dollar Tree’s merchandise mix consists of a balance between consumable merchandise and variety/seasonal merchandise. Family Dollar’s assortment is mainly consumable merchandise and home products. The complementary offerings will allow both the Dollar Tree and Family Dollar brands to expand their categories and assortments.
• Generate significant synergy opportunities. Dollar Tree expects to realize efficiencies involving sourcing and procurement, format optimization and its distribution network. The company says it expects an estimated $300 million in annual run-rate synergies to be fully realized by the end of the third year after the closing.
• Realize enhanced financial performance and improved growth prospects. Dollar Tree will be better positioned to invest in existing and new markets and channels and to grow its store base across multiple brands. The combined company expects to generate significant free cash flow, enabling it to pay down debt rapidly.

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