Dollar Tree Sells Family Dollar Chain in $1 Billion Deal

Dollar Tree announced it will offload its Family Dollar chain to private-equity investors, Brigade Capital Management and Macellum Capital Management, for approximately $1 billion. This marks the end of a lengthy search for a buyer for the underperforming discount retailer, originally acquired by Dollar Tree in 2015 for $9 billion.

Family Dollar has struggled to compete against larger players like Walmart and Amazon, as well as fast-rising online retailers such as Shein and Temu. The chain particularly faced headwinds in selling higher-margin discretionary goods, as inflation pushed consumers to cut back on non-essentials. Analysts called the sale “addition by subtraction,” noting that persistent issues at Family Dollar had weighed on Dollar Tree’s overall financial results and management focus.

Shares of Dollar Tree initially surged 6% in premarket trading on news of the divestiture. However, executives also mentioned fresh cost pressures stemming from new tariffs introduced by the Trump administration in March, which could impact expenses by roughly $20 million per month.

Looking ahead, Dollar Tree’s remaining U.S. stores—now without the Family Dollar brand—reported net sales of $5 billion for the quarter ended February 1, slightly up from $4.96 billion a year prior. Company leaders stated that inflation has prompted even middle- and higher-income consumers to shop more frequently at discount stores, but they remained cautious about hitting 3% to 5% same-store sales growth targets in the current economic climate.