Dollar Tree will sell its Family Dollar business for $1 billion, a fraction of the $9 billion acquisition cost it paid almost 10 years ago, reported the Washington Post. “Several months after saying that it would consider selling Family Dollar, Dollar Tree on Wednesday said it would sell the business to two private equity firms for $1 billion. Family Dollar had 7,600 stores as of February 1.” The sale is expected to close in 90 days.
The private equity firms Brigade Capital Management and Macellum Capital Management are reportedly buying Family Dollar together, wrote the New York Times. In the announcement, Dollar Tree’s chief executive, Michael Creedon, called the sale a “major milestone in our multiyear transformation journey.”
Dollar Tree purchased Family Dollar in 2015 for about $9 billion. About a year ago, Dollar Tree said it would close nearly 1,000 of Family Dollar’s roughly 8,000 stores.
Excluding sales from the Family Dollar banner, Dollar Tree posted net sales of $5 billion for the quarter ended February 1, a marginal rise from $4.96 billion reported a year ago, wrote Reuters. “Dollar Tree expects 2025 net sales from continuing operations to be between $18.5 billion and $19.1 billion. The current inflationary environment is prompting consumers across the board, including in the middle- and higher-income groups, to shop at the discount chain, company executives said on a post-earnings call.”
NACS Daily reported in June that Family Dollar was “exploring the sale of the business,” per Reuters.
“The retailer, like its peer Dollar General, has been grappling with weak discretionary demand as shoppers focus more on less-profitable consumables. It is facing stiff competition from rivals Walmart, Target and Chinese e-commerce platform Temu, which are also offering lower-priced products to attract budget-stretched Americans,” wrote Reuters.
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