Dollar Tree announced Wednesday that it will close nearly 1,000 of its Family Dollar stores after the stores experienced a significant underperformance in 2023, according to a news release from the company.

Dollar Tree plans to close about 600 Family Dollar stores in the first half of this year and 370 Family Dollar and 30 Dollar Tree stores over the next several years.

What this means for Rhode Island stores remains unclear, as Dollar Tree has not yet announced which stores will close.

Counting three large chains — Dollar General, Dollar Tree and Family Dollar — plus the smaller One Dollar Zone, which has stores in six states from Pennsylvania to Massachusetts, including one in Rhode Island, the Ocean State has 100 dollar stores, according to store location information on the chains’ websites.

That 100 includes three pairs of Dollar Tree and Family Dollar stores that share an address.

During the fourth quarter of 2023, Dollar Tree underwent a review of its stores performance to identify locations to close, relocate or re-banner, the company said.

“As a result of this review, we plan on closing approximately 600 Family Dollar stores in the first half of fiscal 2024. Additionally, approximately 370 Family Dollar and 30 Dollar Tree stores will close over the next several years at the end of each store’s current lease term,” the company said in the press release.

How did dollar stores start growing so fast?

The recent rapid growth of dollar stores was, to a certain extent, the result of market forces in place before the pandemic that were amplified by the fundamental shift in the economy brought about by COVID-19.

“They’re the fastest growing store format coming out of the pandemic,” Rae Coloura, a marketing professor at Providence College, told The Providence Journal in 2023.

“Stores like Dollar General, Family Dollar, Dollar Tree, they all had these pretty aggressive growth strategies, whereas Targets and Walmarts weren’t growing anymore – they might been reformatting and renovating stores, but they hadn’t really announced any major growth,” said Coloura.

What’s going to happen

Shares of Dollar Tree tumbled more than 14% Wednesday.

For the three months ended Feb. 3, Dollar Tree lost $1.71 billion, or $7.85 per share. A year earlier the Chesapeake, Virginia, company earned $452.2 million, or $2.04 per share.

Dollar Tree, a Fortune 200 Company, operated 16,774 stores across 48 states and five Canadian provinces as of Feb. 3. Stores operate under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada.

Dollar Tree has not revealed when the store closures are set to begin or what states will be affected by this decision.

With reports from USATODAY and The Associated Press.