Updated:MATTHEWS, N.C. —
In the Charlotte area, these are dicey days for locally grown Family Dollar stores.
First, activist investor Carl Icahn bought a nearly a 10 percent stake in the company.
Now, Icahn is demanding major changes.
In a letter sent to Family Dollar's senior management, Icahn said, "It is imperative that Family Dollar be put up for sale immediately."
READ THE LETTER
Retail watchers said it's no idle boast.
"This threat seems to be very real because the company is not performing well," said retail marketing expert Jane Boyd Thomas.
Family Dollar has been under increasing pressure to change its business practices after a string of poor earnings reports.
Earlier this spring, the company announced it would close hundreds of poor-performing stores and lower prices on more than 1,000 items.
But the intervention of Icahn's investment group raises the ante.
He's demanding the company be put up for sale and said if that doesn't happen, he'll ask other investors to replace the entire board of directors.
"It's what he does," said Charlotte economist John Connaughton. "I think Icahn believes that a management shakeup and change in the focus in the business is what needs to take place."
There's a lot at stake for Family Dollar and the Charlotte community.
Not only does Family Dollar have its corporate headquarters in Matthews, but the founders of the company are among the area's most prominent philanthropists.
The Levine name is scattered on projects across Mecklenburg County, from the Levine Children's Hospital to the Levine Museum of the New South and many others.
In a reply to Icahn's letter, Family Dollar has signaled its intention to fight Icahn's bid for changes.
But experts say however it ends, Family Dollar isn't likely to escape unscathed.
Jane Boyd Thomas said, "Business is often referred to as war. That's what's we're seeing play out here. But to survive they've (Family Dollar leaders) got to make some changes."
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