One of Charlotte's oldest major companies is being sold — again. Family Dollar, which has been owned by Dollar Tree for more than a decade, is being spun off to a couple of private equity firms. Joining me to talk about this, and more, is the Charlotte Ledger Business Newsletter's Tony Mecia for our segment BizWorthy.
Marshall Terry: First, Tony, remind us about Family Dollar's Charlotte roots and what happened with the company when it was sold.
Tony Mecia: Sure, Marshall. This is a company that was started in 1959 by Leon Levine when he was 21 years old — big philanthropist and businessman, whose name is a lot of buildings in the Charlotte area. The company built up to more than 8,000 stores and 10 distribution centers.
It got sold to Dollar Tree in 2015 for $9 billion. And then, as you mentioned, on Wednesday Dollar Tree said it's spinning off Family Dollar. It's selling it for $1 billion. So they bought it for $9 billion in 2015, sold it for $1 billion — so not a very successful integration or merger there.
Terry: OK. So, what's this latest deal, and do we know what the impact will be to Family Dollar stores and operations?
Mecia: Well, so, this is a deal in which Dollar Tree is selling the Family Dollar brand to private equity firms. On the one hand, it will just mean independence, really, for Family Dollar.
But when private equity comes in and buys a company, they usually try to fix it up and then sell it a few years later. They haven't announced any big changes, but I think we could expect maybe a continuation of some of the cuts that the company's been making — that maybe in the number of stores, certainly shaking up the management, that sort of thing.
Terry: Moving on to the spring home-selling season, which is off to a sluggish start in Charlotte. Mecklenburg home sales were down 14% last month from the same month a year earlier, according to Canopy Realtor Association. It was also the weakest February for home sales in five years. What's causing sales to be down so much?
Mecia: It really has a lot to do with interest rates. Interest rates on a 30-year fixed mortgage are a little under 7%. That's, on the one hand, the lowest figure in five months — but it's far higher than rates were a few years ago, when they were maybe in the 2.5% to 3% range. And so, a lot of homeowners are really, sort of, sitting on their houses and not selling them — because to move somewhere, I think as we all know, can be very expensive. And with the interest rates higher, that just adds to the cost.
The median sales price in Mecklenburg last month was $437,500, which was 2% up over a year earlier. So the prices are still moving up a little bit.
Terry: And there's more rough news for residents. Utility bills are up a lot. What's going on with bills for power and gas, and who's under pressure?
Mecia: Yes, it's been an especially cold winter. Duke Energy rates are lower than where they were a year ago. Piedmont Natural Gas rates are higher a little bit — but the energy usage really spiked in January and, to a lesser extent, in February.
There was a study by the Bank of America Institute recently that said that Charlotte had the seventh-highest increase in the country in utility bills over the last winter compared to the previous winter. It's really putting a burden on lower-income households, especially, who have seen lower wage growth.
I went to Crisis Assistance Ministry last week to talk to some folks who were struggling with utility bills and rent. Crisis Assistance told me that the request for help with utility bills — that the amounts that people are seeking are about double what they were from five years ago.
Terry: Let's end in Ballantyne, where you report golf is coming back after a developer removed the golf course there as part of the Ballantyne Reimagined project. But it will be golf on a smaller scale, right?
Mecia: Yes, Marshall. It will be on a slightly smaller scale, not a full-fledged golf course. The president of Northwood Office, John Barton, told the South Charlotte Partners' Breakfast Club last week that at The Ballantyne hotel they're going to be putting in a golf simulator, kind of like a Top Golf. So golf is not entirely gone from that site of Ballantyne Reimagined.
Support for BizWorthy comes from the law office of Robertson and Associates.
