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Dollar General Stores, Inc.
Type Public (NYSEDG)
Founded 1939
Headquarters Goodlettsville, Tennessee, U.S.
Number of locations 8,414[1]
Key people Richard Dreiling, CEO
Industry Discount, Variety store
Products Low cost items
Revenue $10.45 billion (2009)
Operating income $580.48 million (2009)
Net income $108.18 million (2009)
Employees 72,500[1]
Website http://www.dollargeneral.com
In June 2007, Dollar General was acquired by a group of private investors.
A Dollar General in Durham, North Carolina.

Dollar General, Corp is a chain of variety stores operating in 35 U.S. states. The chain operates 8,414 stores and its headquarters is located in Goodlettsville, Tennessee, a suburb of Nashville. The stores were founded in 1939 by Cal Turner in Scottsville, Kentucky as J.L. Turner & Son, Inc. In 1968 they change the name to Dollar General Corporation.[1] As of the third fiscal quarter of 2007, the company was acquired by Kohlberg Kravis Roberts & CO (KKR), a private equity firm, who took the company public in 2009.[2]

Dollar General stores are typically in small shopping plazas or strip malls in local neighborhoods. The company acquired the 280 stores of the P.N. Hirsh Division of Interco, Inc. (now Furniture Brands International, Inc.) in 1983 and in 1985 added 206 stores and a warehouse from Eagle Family Discount Stores, also from Interco, Inc. In recent years, the chain has started constructing more stand-alone stores, typically in areas not served by another general-merchandise retailer. In some cases, stores are within a few city blocks of each other.

Dollar General offers both name brand and generic merchandise — including off-brand goods and closeouts of name-brand items — in the same store, often on the same shelf.

Although it has the word "dollar" in the name, Dollar General is not technically a dollar store because it has goods that are priced at more (or less) than a dollar. However, goods are usually sold at set price points of penny items and up to the range of 50 to 60 dollars, not counting phone cards and loadable store gift cards.

Dollar General typically serves communities that are too small for Wal-Marts. It competes in the dollar store format with national chains Family Dollar and Dollar Tree, regional chains such as Fred's in the southeast, and numerous independently owned stores.

Since the turn of the century, Dollar General has experimented with stores that carry a greater selection of grocery items. These stores (similar to the Wal-Mart Supercenter, but much smaller) operate under the name "Dollar General Market".

Recently, Dollar General began selling produce, meat, and baked goods in new stores called "Super Dollar Generals" in former supermarket locations, even though this idea is similar to the Dollar General Market.

Contents

History

The first Dollar General store opened in Scottsville, Kentucky, on June 1, 1955, the concept was that no item in the store would cost more than one dollar. The idea became a success, and other stores owned by J.L. Turner and his son Cal Turner were quickly converted. By 1957, annual sales of Dollar General’s 29 stores were $5 million. The Turners did not reach this level of success without obstacles. James Luther (J.L.) Turner’s father died in an accident in 1902 when J.L. was only 11. J.L. had to quit school so he could work the family farm and help provide for his mother and siblings. He never completed his education. J.L. knew his limited education demanded that he become a quick study of the world around him. After two unsuccessful attempts at retailing, J.L. became a traveling dry goods salesman for a Nashville wholesale grocer. J.L. left the sales job after 10 years and settled his family in Scottsville, Kentucky. During the Depression, he began buying and liquidating bankrupt general stores. J.L.’s only child, Cal Turner, Sr., accompanied his father to these closeouts at a young age, gaining valuable business knowledge and skills.

In October 1939, J.L. and Cal opened J.L. Turner and Son Wholesale with an initial investment of $5,000 each. Wholesaling quickly gave way to retailing – J.L.’s third and final attempt at retailing. The switch to retailing resulted in annual sales above $2 million by the early 1950s and the rest is history.

J.L. died in 1964. Four years later, the company he co-founded went public as Dollar General Corporation, posting annual sales of more than $40 million and net income in excess of $1.5 million. In 1977, Cal Turner, Jr., who joined the company in 1965 as the third generation Turner, succeeded his father as president of Dollar General. Cal Jr. led the company until his retirement in 2002. Under his leadership, the company grew to more than 6,000 stores and $6 billion in sales.

Acquisition and spinoff

Dollar General is no longer a publicly traded company. On July 6, 2007, all shares of Dollar General stock were acquired by private equity investors for $22.00 per share. An investment group consisting of affiliates of Kohlberg Kravis Roberts (KKR), GS Capital Partners (an affiliate of Goldman Sachs), Citigroup Private Equity and other co-investors completed an acquisition of Dollar General Corporation for a total enterprise value of $7.3 billion. [3]

As a part of the transition to a privately held company, Dollar General is assessing each location as leases run out against a model known as "EZ Stores". This assessment includes evaluating whether the location has a loading dock, garbage dumpsters, adequate parking, and acceptable profitability. Stores that do not pass this evaluation are relocated or closed. Over 400 stores have been closed as part of this initiative. [4]

In August 2009, the company announced it will file for an initial public offering, turning the company, again, into a publicly traded corporation.[5] Although the timing of the Initial Public Offering (IPO) was not announced by Dollar General or KKR, Dollar General filed on August 20, 2009 for an initial offering of up to $750 Million[6] The return of Dollar General to public ownership has been estimated to deliver up to a 30% increase in value to KKR over the two-year period it will have been private, making it a rare gem in KKR's current portfolio.

Motorsports connection

For several years, Dollar General has had a connection with motorsports, particularly in NASCAR. The company is currently the primary sponsor for the #32 Braun Racing Nationwide Series team, which for 2009 is being shared by several drivers including Sprint Cup regulars Brian Vickers and David Reutimann. Dollar General and Braun have been partnered together since 2008, with the team previously sponsoring cars for Frank Cicci Racing and Kevin Harvick Incorporated. Dollar General is also active in the IZOD IndyCar Series since 2008, serving as the primary sponsor for owner/driver Sarah Fisher's Sarah Fisher Racing team, and is the title sponsor for a Nationwide Series race held in Concord, North Carolina every fall.

References

External links

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