Dollar Tree Sells Family Dollar to Private Investors for $1 Billion

A decade after acquiring Family Dollar for more than $8 billion, Dollar Tree is selling the chain.

A pair of private equity groups will acquire Family Dollar for $1 billion, according to a Wednesday (March 26) press release. The deal comes 16 months after Dollar Tree said it was evaluating the future of Family Dollar amid a decline in consumer spending.

Under the deal, which is expected to close in the second quarter of this year, Brigade Capital Management and Macellum Capital Management will team up to take Family Dollar private, per the release.

“This is a major milestone in our multiyear transformation journey to help us fully achieve our potential,” Dollar Tree CEO Mike Creedon said in the release. “We will continue to grow and optimize our Dollar Tree business to maximize value for Dollar Tree associates, customers and shareholders with an enhanced focus on compelling initiatives, including our expanded assortment, significant planned new store openings across the United States, and transactions that advance our growth strategy.”

Dollar Tree announced plans to acquire Family Dollar in 2014, with the deal closing the following year. Rival Dollar General had also made a bid to purchase the retailer.

In fall 2023, Dollar Tree said it was evaluating the future of Family Dollar. The company has since closed nearly 1,000 stores.

The sale comes as Dollar Tree and Dollar General report that their low-income customers face financial pressures.

“Many of our customers report that they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities,” Dollar General CEO Todd Vasos said during an earnings call earlier this month. “As we enter 2025, we are not anticipating improvement in the macro environment, particularly for our core customer. In turn, we know our customers expect value and convenience more than ever.”

Creedon described a similar pattern when Dollar Tree reported earnings in December.

“When you look at the customer cohort, our low-income customers are definitely pressured,” he said during a Dec. 4 earnings call. “We see that and there’s a rise in eat at home. There is belt-tightening among lower-income customers and that dynamic remains a discretionary headwind.”

A lack of confidence can be seen among shoppers of all income levels, The Conference Board said earlier this week in its monthly report on consumer sentiment.