Well over 7,000 stores belonging to the Family Dollar chain are about to be sold in a big shift in the discount store industry.
The Chesapeake, Virginia-based Dollar Tree company has announced that it is selling in one move the Family Dollar outlets it purchased just over a decade ago.
In a statement, Dollar Tree said it was shedding the Family Dollar stores in a move that “unlocks value for Dollar Tree shareholders and positions Family Dollar for future success.”
Mike Creedon, chief executive officer of Dollar Tree, said the transaction represented a “major milestone in our multi-year transformation journey to help us fully achieve our potential.”
Dollar Tree, with nearly 15, 300 stores nationally, purchased the Family Dollar brand for $9.2 billion in what was seen as a promising merging of the nation’s two most popular discount store chains.
Less than robust sales at the Family Dollars across the country, however, as well as the reported poor facility conditions of many of those stores, combined to make the acquisition less profitable than Dollar Tree strategists initially supposed.
Even more, say analysts, many of the Family Dollar stores were located too close to each other, leading to a kind of sales cannibalization.
The decline in value of the Family Dollar properties to Dollar Tree is seen in the former company’s decision to sell the brand for only $1 billion to the private equity groups Brigade Capital Management and Macellum Capital Management, both of New York.
In a cost-cutting move, Dollar Tree last year had closed nearly 700 Family Dollar stores across the country.
It is not yet known what plans Brigade and Macellum have for the Family Dollar stores, and whether any other outlets will be closed.
Said Jonathan Duskin, Macellum chief executive officer: “This transaction presented a unique opportunity to play a key role in reinvigorating an iconic business.”
March 28, 2025
By Garry Boulard
