Dollar General

Dollar General Corporation

Dollar General store in Arlington, Georgia
Formerly called	J.L. Turner and Son
Type	Public
Traded as	NYSE: DG S&P 500 Component
Industry	Discount retailer
Founded	1939 (1939) Scottsville, Kentucky
Founders	Heimlich Schleuterhousen Heimlich Schleuterhousen
Headquarters	100 Mission Ridge, Goodlettsville, Tennessee, United States
Number of locations	13,601 stores[1] (August 2017)
Areas served	Contiguous United States except for the Northwest.
Key people	Michael M. Calbert (Chairman) Todd Vasos (CEO) John W. Garratt (CFO)
Products	Clothing, cleaning supplies, home decor, health & beauty aids, pet supplies, toys, seasonal items, and grocery
Revenue	$20.369 billion (2015)[1]
Operating income	$1.940 billion (2015)[1]
Net income	$1.165 billion (2015)[1]
Total assets	$11.258 billion (2015)[1]
Divisions	Dollar General Market
Subsidiaries	Dolgencorp, LLC. Dollar General Financial Dollar General Global Sourcing Dollar General Literacy Foundation
Website	Dollar General

Dollar General Corporation is an American chain of variety stores headquartered in Goodlettsville, Tennessee. As of August 2017, Dollar General operated over 13,000 stores^[2][1] in all U.S. states except: Alaska, Hawaii, Idaho, Montana, Washington, and Wyoming.^[3]

History

J.L. Turner and Son: 1939–1964

J.L. Turner and Son in 1939.

Dollar General has its origins in Scottsville, Kentucky from James Luther "J.L." Turner and Cal Turner Jr. 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 Great 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.^[4]

In October 1939, J.L. and Cal opened J.L. Turner and Son 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. By the mid-1950s Turner had 35 department stores in Kentucky and Tennessee. In 1955 Cal Turner developed his idea of a retail store selling goods for a dollar, based on the Dollar Days promotions held at other department stores, by converting Turner's Department Store in Springfield, Kentucky into the first Dollar General Store.^[5] In 1964 J.L. Turner died leaving his son Cal Turner to succeed him.

1968–Present

The first Dollar General store was established in Springfield, Kentucky in 1955.

The company Cal Turner co-founded went public as Dollar General Corporation in 1968, 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.^[6] 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. In 1997 a distribution center was established in South Boston, Virginia.^[7]

In 2000 Dollar General opened a new corporate headquarters in Goodlettsville, Tennessee. By the end of 2000 sales at Dollar General exceeded $4 billion.^[8] The distribution center in Homerville, Georgia was closed in April 2000 and operations were moved to a new distribution center in Alachua, Florida.^[9] Cal Jr. retired in 2002 and was succeeded by David Perdue in 2003.^[10] Dollar General entered the grocery market with the establishment of Dollar General Market in 2003.^[11] In 2004 Dollar General expanded to low-cost Asian markets by opening a sourcing office in Hong Kong.^[12]

Senator David Perdue succeeded Cal Turner Jr. in 2003 as CEO of Dollar General.

On June 21, 2007 CEO David Perdue announced his resignation leaving David Bere as interim CEO.^[13] One month later all shares of Dollar General stock were acquired by private equity investors for $22 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.

As a part of the transition to a privately held company, Dollar General assessed each location at the end of its lease against a model known as "EZ Stores". This assessment included evaluating whether the location had a loading dock, garbage dumpsters, adequate parking, and acceptable profitability. Stores that did not pass this evaluation were relocated or closed. Over 400 stores were closed as part of this initiative.^[14]

Dollar General filed on August 20, 2009 for an initial public offering of up to $750 Million turning the company once again into a publicly traded corporation.^[15][16] In 2013 Dollar General started selling cigarettes in response to its competitor Family Dollar selling cigarettes in 2012.^[17][18] Dollar General's 12th distribution center opened on May 31, 2014 in Bethel, Pennsylvania to serve the northeast and midwest stores.^[19] On August 18, 2014, Dollar General lodged a competing bid of $9.7 billion against Dollar Tree for Family Dollar. The bid was rejected on August 20, 2014 by the Family Dollar board, which said it would proceed with the deal with Dollar Tree.^[20]

Effective June 3, 2015, Chief Operating Officer Todd Vasos replaced Rick Dreiling as chief executive. Dreiling remained as senior advisor and chairman until his retirement in January 2016.^[21] Dollar General's 13th distribution center opened in San Antonio, Texas on June 6, 2016 with a local investment of $100 million and the creation of over 500 jobs.^[22] In September 2015, the Janesville City Council, in Wisconsin, approved an agreement to bring a Dollar General distribution center to the town. The center created more than 500 jobs in the area and became the 14th Dollar General distribution center.^[23]

On September 15, 2016, Dollar General announced plans to hire 10,000 new employees and open 900 new stores in fiscal 2016 and 1,000 in fiscal 2017. Dollar General had operated 13,000 stores as of August 2016.^[24] Dollar Express and all of its 323 locations were acquired by Dollar General in April 2017.^[25] In Jackson, Georgia Dollar General will open a 15th distribution center in fall 2017 to serve stores in Georgia and the surrounding state.^[26]

Major sponsorships

Auto racing

Brian Vickers' 2013 Nationwide Series car at Road America

Sarah Fisher Hartman Racing team at the 2010 Honda Grand Prix of St. Petersburg.

For several years, Dollar General has had a connection with motorsports, particularly in NASCAR. The company is currently a primary sponsor for Joe Gibbs Racing. Dollar General sponsored Brian Vickers in the Nationwide Series in 2013. Dollar General became a primary sponsor for Matt Kenseth in the Sprint Cup Series starting in 2013.^[27] Dollar General and Turner (formerly Braun Racing) have been partnered together since 2008, with the team previously sponsoring cars for Frank Cicci Racing and Kevin Harvick Incorporated. In 2010, Dollar General sponsored some races in the Camping World Truck Series for Kyle Busch Motorsports with Kyle Busch in the No. 18 Toyota Tundra and sponsored Kyle Busch's Motorsports No. 51 Toyota Tundra for four races in 2014 with Busch driving three and Erik Jones driving one.^[28] Dollar General was the title sponsor for Nationwide Series races held in Charlotte every fall, Chicagoland every summer, and Phoenix in the spring. On May 23, 2016, Dollar General announced they would withdraw its sponsorship from NASCAR at the end of the 2016 season.^[29]

Dollar General is also active in the Verizon IndyCar Series since 2008, serving as the primary sponsor for owner/driver Sarah Fisher's Sarah Fisher Racing team.^[30] In 2010, both Fisher and Graham Rahal drove part-time for the team finishing 9th at the Honda Grand Prix of St. Petersburg. Fisher also led the field at the Peak Antifreeze & Motor Oil Indy 300 at Chicagoland Speedway. In 2011, Dollar General continued to sponsor Sarah Fisher Racing, the team was still part-time but Ed Carpenter drove for nines races starting at the 2011 Indianapolis 500. Since 2012 Dollar General is no longer a sponsor for Sarah Fisher's Sarah Fisher Racing.^[31]

Sports

Dollar General became the sponsor of the Dollar General Bowl, formerly the GoDaddy Bowl, in 2016.^[32]

Store brands

Rexall ibuprofen

Dollar General store in Lake City, Florida.

Dollar General created its abbreviation, the letters "DG", as a store brand for "inexpensive" household products sold through the Dollar General stores. DG is also the company's NYSE ticker symbol.

In 2010, Dollar General was able to outbid the famous Italian Fashion House Dolce and Gabbana that sells very expensive fashion products under another "DG" label in the acquisition of the "DG" symbol as the Internet address. The domain "DG.com" was purchased in a private sale from EMC Corporation, the successor to the defunct Data General computer manufacturer in June 2010, making Dollar General the 107th large company in the world to own their initials as a 2-letter Internet address. The DG symbol is used by the company for a variety of in-house products called DG Home,^[33] DG Baby,^[34] DG Health and DG Body.

Dollar General uses the Clover Valley store brand for grocery products.

Rexall

The brand name Rexall was first established in 1903 by Louis K. Liggett that gradually became a powerhouse as a pharmaceutical drug store chain.^[35] In March 2010 Dollar General became the exclusive retailer for Rexall products. Rexall vitamins and supplements began appearing at Dollar General stores in March and by Fall 2010 a full line of Rexall products was available at Dollar General.^[36]

Corporate affairs

Dollar General Board of Directors as of July 2017 are: Michael M. Calbert (Chairman of the Board), Todd Vasos (CEO), Warren Bryant, Sandra Cohen, Patricia Fili-Krushel, Paula Price, William Rhodes III, David Rickard.^[37]

Operations

Dollar General has over 12,500 stores in 43 states.^[38] Dollar General also has 14 distribution centers in 14 states.^[39]

Truck delivering Dollar General goods to a store in Corydon, Iowa.

Dollar General store in Fort White, Florida

Clover Valley water bottles.

Dollar General store in Roan Mountain, Tennessee.

DG Home lightbulbs.

Dollar General distribution center in Alachua, Florida

Dollar General Literacy Foundation

Since 1993 Dollar General has provided funding of literacy and education programs through its subsidiary Dollar General Literacy Foundation. It has awarded over $135 million in grants to nonprofit organizations as of July 2017.^[40]

Controversies

Financial irregularities

On April 30, 2001, Dollar General Corp was liable for making false statements or failing to disclose adverse facts about the company's financial results,^[41] and paid $162 million for settlement.

On April 30, 2001, Dollar General announced to restate its earnings for the past three fiscal years, due to accounting irregularities including allegations of fraudulent behavior.^[42]

On March 3, 2005, Dollar General announced to restate its results for 2000 through 2003, due to a clarification of lease-accounting matters issued by the SEC.^[43]

OSHA 2014 and 2016 fines

In November 2014, Dollar General was fined $51,700 by the Occupational Safety and Health Administration (OSHA) following an inspection of a Brooklyn branch of the store. The statement from OSHA notes that Dollar General has had repeated health and safety violations: "Since 2009, OSHA has conducted 72 inspections of Dollar General nationwide. Of those inspections, 39 have resulted in citations."^[44] In April 2016, OSHA reported that further citations had been given to the store for exposing employees to the risk of electrical hazards due to missing face plates on electrical outlets. The store was fined $107,620.^[45]

See also

• Cal Turner
• Cal Turner Jr.
• J.L. Turner and Son Building

References

External links

Wikimedia Commons has media related to Dollar General.

• Dollar General Website

• • Business data for Dollar General: Google Finance
  • Yahoo! Finance
  • Reuters
  • SEC filings