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GOODLETTSVILLE, TN—Dollar General has begun its recently announced store closure plan, and it is “moving forward as planned,” executives said at the company’s third quarter conference call.

In late November, the chain announced plans to close up to 400 stores that did not meet specific sales criteria during fiscal 2007. The first wave of 130 store closings began last week, and a steering committee has been formed to oversee the closings and the change of the chain’s inventory model, said David M. Tehle, executive vp and CFO.

“We looked at all our stores, at a variety of factors to determine which would be closed,” Tehle said. “We looked at competitive forced in the marketplace, the real estate factor and the financial aspects of the stores.”

In addition, store expansion will be slowed during the next fiscal year. After opening approximately 600 new stores in fiscal 2006, the chain will open 300 new stores in fiscal 2007 and 400 new units in fiscal 2008, remodeling 300 stores in each of those years. Beginning in fiscal 2009, expansion will rise, with approximately 700 new stores and 450 remodels to open. Dollar General operates 8,276 neighborhood stores across the United States.

“We’re making the changes we need to be competitive,” said David A. Perdue, chairman and CEO.

The chain reported a net loss of $5.3 million for the quarter, compared with earnings of $64.4 million for the same quarter last year. Results this year included pre-tax costs and charges of approximately $79.2 million.

Net sales for the quarter were $2.21 billion, up 7.6% increase over fiscal 2005. Same-store sales rose 2% year over year.

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