Dollar Tree is selling Family Dollar to a pair of private equity firms for $1 billion, a release said, nearly a decade after it acquired the bargain chain for nearly $9 billion.
The sale comes as Dollar Tree announced it had planned to close nearly hundreds of Family Dollar stores.
In 2015, the discount retailer acquired Family Dollar for nearly $9 billion following a bidding war with rival Dollar General. After acquiring the chain, Dollar Tree struggled with supply chain issues, poor store locations and other operational difficulties, analysts had said.
Dollar Tree had been scouting options for Family Dollar for a while and said Wednesday that the sale to Brigade Capital Management and Macellum Capital Management will allow it to focus on its core business.
“Since 1959, Family Dollar has served its customers by offering convenient, high-quality products at a great value and the business is a pillar in communities across the United States," Matt Perkal, partner at Brigade said in a release. "We look forward to continuing and enhancing Family Dollar as its own enterprise, which we are confident will drive greater success for the business and value for all of Family Dollar’s stakeholders, including employees, customers, and communities.”
Saunders said Brigade and Macellum with have several issues to fix at Family Dollar, including pricing that isn’t as sharp as many of its rivals and a customer base that isn’t as loyal.
The deal is expected to close later in the second quarter of 2025, the release said.
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Store closures, price increases and more
In 2024 earnings call, Dollar Tree said it was raising prices across its thousands of stores nationwide, including raising its highest priced items to $7. In addition to an increase in the price cap, the base price for more than 300 items in-store will be raised from $1.25 to $1.50 as part of a "multi-price expansion strategy."
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At the time, Dollar Tree also said a price cap of $10 was also on the table in the coming years.
The same year, Dollar Tree said it was set to close about 600 Family Dollar Stores in the first half of the year, followed by 370 more Family Dollar Stores, and 30 Dollar Tree stores over the next several years.
According to the Peoria Journal Star, some of the Family Dollar locations set to close were in Illinois.
In a recent earnings call, rival Dollar General also said it planned major store closures following a “store portfolio optimization review."
As of Feb. 1, 2025, Dollar Tree operated a total of 16,500 Dollar Tree and Family Dollar stores across 48 states and five Canadian provinces, the company said.
