Dollar Tree has agreed to sell its struggling Family Dollar business to a consortium of private equity investors led by Brigade Capital Management and Macellum Capital Management for approximately $1bn, concluding a nearly year-long search for a buyer, according to a report by Reuters.
The sale follows years of challenges for Family Dollar, which Dollar Tree originally bought in 2015 for $9bn, with the discount retail chain struggling to compete with major retailers including Walmart, Amazon, Shein, and Temu.
Evercore analyst Michael Montani described the sale as a positive move for Dollar Tree, calling it “addition by subtraction,” noting that Family Dollar had been a drag on sales, margins, and management resources.
Despite attempts to improve performance by remodelling stores and introducing multi-price points, Family Dollar continued to face declining sales in discretionary categories such as home decor and apparel as inflation dampened consumer spending.
Following news of the sale, Dollar Tree shares rose as much as 6% in pre-market trading before moderating after the company warned of rising costs. The retailer projected a $20m monthly impact from new tariffs introduced by President Donald Trump on imports from Canada, China, and Mexico.
For the quarter ending 1 February, Dollar Tree reported net sales of $5bn, up slightly from $4.96bn the previous year, excluding Family Dollar’s contribution. The company forecasts net sales for 2025 from continuing operations to range between $18.5bn and $19.1bn.
