GOODLETTSVILLE, TN-Dollar General Inc. is proceeding with a previously announced $750-million initial public offering, though observers say the deal may have a downside to it because of billions of dollars in debt and lease obligations. A report by points out that some of the IPO proceeds will be used to pay down the $4.1 billion currently hanging over the company.

Dollar General, which offers bargain merchandise to customers in smaller towns, has more than 8,500 stores in 35 states and posted sales of $10.5 billion last year. It was previously publicly traded from 1968 until two years ago, when private equity firm Kohlberg Kravis Roberts bought the company for $7 billion.

Because of frugality among shoppers during the ongoing recession, Dollar General is considered a strong performer in the retail sector with 9% growth in stores open for more than a year. Stores are typically 9,000 square feet and are located in high-traffic areas within cities with at least 4,500 population and median household income of less than $75,000.

Although Dollar General’s IPO is in the preliminary stages, Standard & Poor’s announced last Friday that it has placed the retailer on CreditWatch with positive implications. Meanwhile, Wall Street analysts are wary of the company’s current debt, especially considering that most of its locations are leased. “If Dollar General has a lot of lease obligations in addition to its debt, that could be concerning,” Matt Arnold of Edward Jones told

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.