Business

Dollar Tree sells Family Dollar to private equity firms

By MICHELLE CHAPMAN, Associated Press Business Writer

After years of trying to integrate Family Dollar into its business model, Dollar Tree has decided to sell the bargain chain to private equity firms for $1 billion.

In 2015, Dollar Tree Inc. acquired Family Dollar for over $8 billion following a bidding war with Dollar General. However, last year, Dollar Tree announced plans to close several Family Dollar stores and incurred substantial charges related to the acquisition.

With the sale to Brigade Capital Management and Macellum Capital Management, Dollar Tree aims to refocus on its core operations. Mike Creedon, Dollar Tree’s CEO, expressed that this transaction marks a significant step in their transformation journey.

According to Neil Saunders from GlobalData, Dollar Tree faced challenges post-acquisition, including supply chain issues and operational difficulties. Despite efforts to turn things around, Dollar Tree struggled amidst tightening consumer spending and economic uncertainty.

Family Dollar, now based in Virginia, will undergo revitalization under the new ownership. Jonathan Duskin, CEO of Macellum, sees this as an opportunity to reinvigorate the iconic brand.

Brigade and Macellum will need to address pricing and customer loyalty issues at Family Dollar post-acquisition. The deal is set to close in the second quarter, with Dollar Tree’s stock already showing a 5% increase.

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