Jun 5, 2024 - Business

Dollar Tree weighs sale of Family Dollar chain

Family Dollar and Dollar Tree stores next to each other.

Photo: Justin Sullivan/Getty Images.

Discount retailer Dollar Tree has launched a strategic review of its Family Dollar unit, which it says could result in a sale or spinoff.

The big picture: Sometimes when you win, you lose.

  • Dollar Tree beat out rival Dollar General to buy Family Dollar for over $9 billion in 2015, but the deal has been beset by everything from recalls to supply chain breakdowns to a warehouse rat infestation.
  • One bank analyst recently estimated that the smaller chain would be valued at just around $2.2 billion in a sale.

By the numbers: Family Dollar earlier this year said it would close around 1,000 of its 16,700 stores.

  • Same-store sales rose just 0.1% in its first fiscal quarter, while they rose 1.7% at Dollar Tree stores.

Go deeper, via the WSJ: "Dollar Tree stores are mostly in suburban locations and cater to middle-income households seeking party supplies, crafts or other knickknacks ... Family Dollar locations are more concentrated in urban areas, and sell groceries, cleaning products and other essential items at various price points."

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