Dollar Tree is reviving an Oklahoma distribution center that was destroyed last April after being hit by a tornado.
The discount retailer is returning to Marietta, Okla. with a new 1-million-square-foot facility intended to replace the older site, which was officially closed in May.
The new facility is anticipated to be fully operational by spring 2027, and will serve 700 Dollar Tree stores across the west and southwest regions of the U.S. This builds on the reach of the prior building, which supplied products to 600 stores across 12 states.
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According to the company, the distribution center will be temperature-controlled with a “high level of mechanization,” including high speed sortation, designed to improve overall efficiency.
“We are thrilled to announce our return to Marietta,” said Mike Kindy, executive vice president and chief supply chain officer, Dollar Tree, Inc., in a statement. “This region and the Marietta community are critically important in our supply chain network and will be essential to our future growth. We’re proud of the role we’ve played in the greater Marietta community, and we hope to welcome back many associates, bringing the Dollar Tree spirit back to the area.”
More than 450 associates worked at the facility at the time of incident late last April, and was the largest employer in the town of 2,800 people, according to a report from The Oklahoman.
Oklahoma Governor Kevin Stitt said the new distribution center would employ 400 workers.
“The reinvestment in the community is a testament to the importance of building strong local relationships and furthers our reputation as a business-friendly state,” Stitt said.
The hole left by the Marietta facility’s absence has been significant, according to the company’s annual report released in March.
Dollar Tree said it recently has experienced capacity pressure in its distribution network and is working to expand distribution center capacity, including to replace some that was lost with the Oklahoma location.
“To the extent that we are unable to, or experience delays in, opening new distribution centers or otherwise expanding our capacity, our product availability, product mix, overall sales and merchandise margins could be impacted, especially at Dollar Tree,” the retailer said.
In the meantime, the dollar store plans to convert the Odessa, Texas, Family Dollar distribution center to a Dollar Tree distribution center in the second quarter of fiscal 2025.
Damage to the original warehouse was vast, with the tornado tearing through the building at one of its corners. The destruction expanded through to the center of the facility, with portions of the roof and one side of the exterior being ripped off.
Dollar Tree incurred $117 million in losses due to the natural disaster, with $70 million related to damaged inventory and another $47 million related to property and equipment, according to the annual report. Those losses were fully offset by insurance receivables.
“In addition to the loss of inventory in the facility and the facility itself, we incurred additional costs as a result of additional stem miles for product delivery and outside storage for the stores previously serviced by that distribution center, and we expect those costs to continue in 2025,” said Dollar Tree in the report.
As of Feb. 1, 2025—not counting Marietta—Dollar Tree operated 15 U.S. distribution centers occupying a total of 14.1 million square feet, and two Canada distribution centers. The DCs deliver approximately 90 percent of store inventory, with the remaining 10 percent coming directly from vendors or third-party distributors.
Dollar Tree’s wider corporate structure and store footprint will look a lot different by the time the new Oklahoma warehouse is up and running.
The discount retailer sold off the Family Dollar banner for $1 billion to private equity firms Brigade Capital Management and Macellum Capital Management, a decade after buying the rival dollar store for an $8.5 billion price tag.
A month before the Oklahoma tornado, Dollar Tree had already committed to closing 970 Family Dollar locations. Then in last June, the company put Family Dollar up for sale. As of Feb. 1, approximately 695 stores in the batch were closed.
The company has been a poor performer in recent years, with the company reporting a net loss of $3.7 billion in its fourth quarter. Net sales rose a paltry 0.7 percent to $5 billion from $4.96 billion a year ago.
