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Dollar Tree considers selling its Family Dollar brand

There is no timetable for when a review of strategic alternatives for Family Dollar will be completed, the company added.
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Dollar Tree said it is considering a sale “or other disposition” of its Family Dollar store chain.

The discount store foreshadowed the potential move last year when it said it was planning a comprehensive review of its Family Dollar portfolio and closed nearly 1,000 of its underperforming store locations under both brands.

However, the company simultaneously opened about 1,200 new Dollar Tree-Family Dollar combo stores in rural towns that had “limited retail options,” with plans to open hundreds more in coming years.

It’s not clear if those plans for more combination stores are still in the works or what would happen to those stores if a sale or spinoff of Family Dollar moved forward.

Dollar Tree said there is no timetable for when the review of strategic alternatives for Family Dollar will be completed.

“Our goal is to position both the Dollar Tree and Family Dollar banners to progress further and faster, and to determine whether the exclusive attention of a dedicated team will benefit both, while creating value for Dollar Tree shareholders and other stakeholders,” said Dollar Tree CEO and Chairman Rick Dreiling in a statement.

Dollar Tree shopping bags rest in a shopping cart

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Dollar Tree, based in Chesapeake, Virginia, took over Family Dollar in 2015 after winning an $8 million bidding war with rival Dollar General. However, financial reports show it has had difficulty absorbing the brand.

In what became a stark sign of the times, Dollar Tree in 2021 raised its baseline price of in-store items for the first time in 35 years. It was one of the few chains left where every item cost $1. Now, its prices range from $1.25 to $7 for various items.

The retailer said it is aggressively trying to expand its Dollar Tree banner and it recently acquired 170 stores in Arizona, California, Nevada and Texas from the now-bankrupt 99 Cent Only chain to be reopened under its brands.