After a rocky marriage that cost billions and closed thousands of doors, Dollar Tree is calling it quits with Family Dollar.
Here’s what’s going down in the discount aisle.
Dollar Tree Is Cutting Its Losses and Selling Family Dollar
Dollar Tree is officially selling Family Dollar to two private equity firms — Brigade Capital Management and Macellum Capital Management — for just north of $1 billion. The sale marks a dramatic chapter closure on a deal that originally cost Dollar Tree nearly $9 billion in 2015. CEO Mike Creedon called it a “major milestone” in the company’s multi-year transformation plan, which is corporate for “we’re done bleeding money on this.”
Store Closures Were Already in Motion
This sale wasn’t out of the blue as Dollar Tree already announced plans to close nearly 1,000 Family Dollar stores — 600 of them closed in the first half of 2024, and around 370 more are expected to shut down as leases expire over the next couple of years.
Why the Split?
The company blamed inflation, retail theft, and the end of pandemic-era government benefits for Family Dollar’s decline. The competition from big-box retailers like Walmart and online platforms like Amazon all didn’t help to the ultimate demise of the discount chain.
What’s Next for Dollar Tree and Family Dollar?
Under new ownership, Family Dollar will keep its headquarters in Chesapeake, Virginia. Meanwhile, Dollar Tree plans to refocus on its core brand and customer base. CEO Mike Creedon said the move will allow the company to “fully dedicate ourselves to Dollar Tree’s long-term growth, profitability, and returns on capital.”
For more retail and shopping news, sign up for our free newsletters.
