Dollar Tree is selling Family Dollar for $1 billion
Dollar Tree is selling the Family Dollar brand to two private capital firms for just over $1 billion, the company announced on Wednesday after years of struggling with Family Dollar’s operation.
The private equity firms Brigade Capital Management and Macellum Capital Management are buying Family Dollar together, according to the statement. In the announcement, Dollar Tree’s chief executive, Michael Creedon, called the sale a “major milestone in our multiyear transformation journey.”
Dollar Tree purchased Family Dollar in 2015 for about $9 billion, hoping the merger would help both stores reach more customers. Dollar Tree struggled to manage the Family Dollar brand. About a year ago, Dollar Tree said it would close nearly 1,000 of Family Dollar’s roughly 8,000 stores.
In June, Dollar Tree announced it was exploring plans to sell Family Dollar, citing inflation, theft and the end of pandemic-era benefits from the federal government.
Investors seemed to respond favorably to the announcement, as Dollar Tree’s stock jumped Wednesday morning.
Family Dollar stores are primarily located in urban areas, and they serve a majority of low-income customers who have been hit the hardest by inflation. Dollar Tree will raise the price of most items in 2021 to $1.25. The company has been keeping its prices at $1 since 1971. Dollar Tree introduced a multi-tiered pricing structure in some of their stores last year. Some of the prices increased to as much as $7.1001010
