THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, January 14, 1995 TAG: 9501140169
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 60 lines
Norfolk-based Dollar Tree Stores Inc. is going public.
Shareholders of closely-held Dollar Tree filed a plan Friday with the Securities and Exchange Commission to sell some of their stock to the public.
Dollar Tree, which operates a 20-state chain of variety stores selling items for $1 or less, is one of the largest retailers headquartered in Hampton Roads. It operates 409 stores in strip centers and malls around the country.
Founded in 1986, Dollar Tree had sales of about $167 million in 1993. In terms of revenues, the retailer is the 15th-largest independent company based in Hampton Roads.
It employs about 350 people at its headquarters and distribution center at 2555 Ellesmere Ave. in Norfolk and more than 4,000 nationwide.
The shareholders are offering 2.5 million shares of common stock for sale. That will amount to a 15.1 percent stake in the company after the offering.
Proceeds from the sale will go to the selling shareholders, not to the company.
While the offering wasn't priced, a price of $16 per share was used to calculate the filing costs. If that's the actual offering price, the sale would raise $40 million.
The selling shareholders include six directors and executives of the company, including J. Douglas Perry, chairman of the board and a director; Macon F. Brock Jr., president, chief executive and a director; and H. Ray Compton, executive vice president, chief financial officer and a director.
The executives could not be reached late Friday for comment.
Montgomery Securities and Smith Barney will underwrite the stock sale. After the initial public offering, Dollar Tree will have 16.54 million shares outstanding.
Dollar Tree reported earnings of $2.67 million for the nine months ended Sept. 30, up from $1.16 million during the same period a year earlier.
The SEC must approve the shareholders' plan before the offering can go forward.
Dollar Tree became the largest $1 variety retailer in the nation last year after its chief rival, Everything's A Dollar Inc., filed for Chapter 11 bankruptcy in December 1993 and closed about 100 unprofitable stores.
The retailer began life as an offshoot of the K&K Toys chain. For several years it grew in the shadow of its bigger sibling, but in 1991 the owners sold K&K to Melville Corp., which merged the 136-store chain with its Kay-Bee Toys chain.
With money from that sale, Perry and Brock, K&K's top executives, focused on expanding Dollar Tree.
And expand it did. Dollar Tree thrived in the tight times brought on by the recession of the early 1990s.
In 1992, sales grew nearly 70 percent, to $120 million, as Dollar Tree opened 73 new stores. Sales grew nearly 41 percent in 1993 as the chain added another 74 stores and a second distribution center in Memphis, Tenn. MEMO: Bloomberg Business News contributed to this report.
by CNB