Dollar Tree is Exploring the Sale of its Troubled Store Chain Family Dollar

Family Dollar Retail Store in Augusta, Georgia, USA
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Dollar Tree seems to be ready to cut its losses on the troubled store chain Family Dollar. The company announced on Wednesday that it is currently exploring various options for the future of Family Dollar, including a sale.

According to Dollar Tree CEO Rick Dreiling, the company believes that the split would be beneficial due to “unique needs” of two brands.

“The unique needs of each banner at this time – transformation at Family Dollar and growth acceleration at Dollar Tree – lead us to the decision to conduct a thorough review of strategic alternatives for the Family Dollar business,” Dreiling said in a statement.

Dollar Tree acquired Family Dollar back in 2015 in an $8.5 billion deal. The acquisition didn’t age well, as Family Dollar stores underperformed in recent years and negatively impacted its parent company’s business. Just recently, Dollar Tree announced it is planning to close 1,000 stores in the foreseeable future, with 970 of them being under the Family Dollar banner.

Dollar Tree didn’t put a timeline on making the final decision on Family Dollar and might also go with the spinoff route. However, analysts already predict that it will be difficult to find someone to take Family Dollar off their hands unless they are willing to take a huge loss.

After the news broke out, the shares of Dollar Tree dropped 4.92%. At $114.38, the company’s stock is 19.76% down year-to-date.

Tom P
Tom loves sports so much but prefers watching other people do it. He prefers not to share what teams he's supporting but he is willing to admit that Lebron James is the king. Other than sports, he's interested in stock markets and food.