Dollar Tree, Inc. (NASDAQ:DLTR) announced it will sell its struggling Family Dollar chain to private equity firms Brigade Capital Management and Macellum Capital Management for $1 billion, a fraction of the $9 billion it paid for the discount retailer in 2015.
The deal, expected to close next quarter pending regulatory approval, marks the end of Dollar Tree’s attempt to integrate Family Dollar, which has struggled with messy stores, high prices, and stiff competition from Dollar General and Walmart.
“This is a major milestone in our multi-year transformation journey,” Dollar Tree CEO Mike Creedon said in a statement, adding that the sale would allow the company to focus on expanding and optimizing its core Dollar Tree business.
Family Dollar, which operates about 8,000 US stores catering to low-income urban shoppers, has faced challenges from over-expansion and inflationary pressures. The chain has closed hundreds of stores in recent years and was fined $41.6 million in 2023 for selling goods from a rat-infested warehouse.