Dollar Tree, Inc. BB #:377981 announced March 25 that it entered into an agreement to sell Family Dollar BB #:377980 to private equity investors.
In a financial report, Dollar Tree confirmed it will sell the Family Dollar chain to Brigade Capital Management and Macellum Capital Management for $1.007 billion, subject to adjustments, with the deal expected to close in about 90 days.
In June 2024, Dollar Tree announced it started a strategic review of Family Dollar for a potential sale.
Dollar Tree acquired Family Dollar in 2015 for about $9 billion, outbidding rival Dollar General.
While both Dollar Tree and Family Dollar operate in the discount retail space, the two chains generally have different customer bases, as Dollar Tree stores tend to be more suburban, while Family Dollar stores are more often in urban areas, selling groceries and household essentials at discount rates.
Dollar Tree has struggled to grow the Family Dollar business and announced in 2023 it planned to close nearly 1,000 underperforming Family Dollar stores due to many challenges that included rising inflation and store theft.
“This is a major milestone in our multi-year transformation journey to help us fully achieve our potential,” said Mike Creedon, CEO of Dollar Tree, in a press 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.”
Creedon continued, “Under the experienced, dynamic leadership of Family Dollar President Jason Nordin, and with the financial support of Brigade and Macellum, Family Dollar will be well-positioned for growth as a private company. With the support of a dedicated team, Family Dollar will be able to strengthen its commitment to providing affordable and essential goods to customers so they can do more with less.”
Matt Perkal, Partner at Brigade, said, “Since 1959, Family Dollar has served its customers by offering convenient, high-quality products at a great value and the business is a pillar in communities across the United States. We look forward to continuing and enhancing Family Dollar as its own enterprise, which we are confident will drive greater success for the business and value for all of Family Dollar’s stakeholders, including employees, customers, and communities.”
“This transaction presented a unique opportunity to play a key role in reinvigorating an iconic business. Throughout this process we have met an exceptional group of executives who are dedicated to the Company and its customers. We look forward to executing the strategic plan we have developed together,” added Jonathan Duskin, CEO and Partner of Macellum. “In particular, we are excited that Duncan MacNaughton will be joining the company as Chairman, where his insights as a former President and Chief Operating Officer of the company, and broader industry experience, will be invaluable.”
Duncan MacNaughton added, “I am excited to collaborate with the Family Dollar team and our incredibly capable and supportive new investors to drive the business forward in this next chapter of its evolution. Family Dollar has a tremendous potential to grow and succeed as an independent company, and I am honored to be able to play a role in helping the company fully realize that opportunity.”
