by: Jim Bradley Updated:
MATTHEWS, N.C. - Family Dollar says it will be cutting jobs and closing about 370 underperforming stores as it looks for ways to improve its financial performance.
The company's stock fell more than 3 percent in Thursday premarket trading.
The announcement came as Family Dollar reported its profit and revenue declined in the second quarter as it dealt with bad winter weather.
"There are going to be 300 plus stores that are going to close. People are going to lose their jobs. There will be more cutbacks in Charlotte, the staff here, to support those stores. That's never a good thing," said economist John Connaughton.
The discounter said the store closings and job cuts should lower annual operating expenses by $40 million to $45 million, starting with the fiscal third quarter. Family Dollar Stores Inc. currently has more than 8,100 stores in 46 states.
Family Dollar says it will also lower prices on 1,000 basic items in an effort to lure customers back to its stores. It also plans to continue building new stores, though at a slower pace. Retail experts say what seems to be a contradiction; closing stores while building new ones, may be a successful strategy.
"You take stores that are under performing, you get rid of the dead weight and then you continue to open stores where it makes sense," said JCSU Marketing professor Yvette Russell.
The Matthews, N.C., company says it will also slow new store openings beginning in fiscal 2015 to bolster its return on investment.
Family Dollar hasn't responded to Channel 9’s requests for information, including which stores are being considered for closure.