FAMILY Dollar has now become the official rival of Dollar Tree after the discount chain finally cut ties with its previous parent company.
Family Dollar will now operatore under new private owners afrer the chain was acquired from Dollar Tree in a billion-dollar deal.
Family Dollar has now become the official rival of Dollar Tree[/caption]
Dollar Tree sold its Family Dollar business[/caption]
Private equity firms Brigade Capital Management, Macellum Capital Management bought the budget retailer – breaking it up from Dollar Tree.
Though Family Dollar will remain headquartered in Chesapeake, Va.
The budget retailer said in a press release that it will continue its mission to “serve the underserved,” focusing on the opportunity to build a “new Family Dollar.”
Duncan MacNaughton, Family Dollar chairman and CEO, said: “This is a defining moment for Family Dollar — a chance to return to our roots, refocus on our unique strengths, and build a future tailored to the communities we serve.
“We’re energized by the opportunity to stand on our own and reimagine what value means for families across America.”
Back in mid-2024, Dollar Tree began looking for strategic alternative plans for the Family Dollar, which it iniiuatly acquired or $9million.
Bosses announced back in March that Dollar Tree is to sell its Family Dollar business in a deal worth $1 billion.
It came after execs completed their wave of shutdowns that saw 1,000 Family Dollar outlets closed across the US.
Mike Creedon, the CEO of Dollar Tree, welcomed the deal.
“This is a major milestone in our multi-year transformation journey to help us fully achieve our potential,” he said.
Creedon revealed that Dollar Tree’s portfolio of stores will be increased.
There are more than 16,000 Dollar Tree stores across the US and the budget-friendly brand has a presence in 48 states.
Creedon also teased the chain’s future plans, including “compelling” initiatives, and product expansion.
Dollar Tree bought Family Dollar for $9 billion in 2015, staving off competition from fellow budget retailer Dollar General.
Family Dollar stores are located in cities and sell goods between $1 and $10.
But, retail experts have linked relatively high prices to the company’s downfall, per CNN.
And, low-income Americans shopping behavior has also impacted the brand.
“The dollar store sector seems to be facing existential uncertainties,” UBS analyst Michael Lasser revealed in a note seen by CNN.
Todd Vasos, CEO of Dollar Tree’s rival, Dollar General, warned its shoppers have been impacted by inflation.
“Many of our customers report they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities,” he said on an earnings call in March.
Dollar Tree pricing
Despite the name of the store, Dollar Tree recently added items that cost more than $1 to its inventory.
Most items at the store cost no more than $1.25, but items in the Dollar Tree Plus section cost up to $5.
Dollar Tree introduced Plus aisles to 100 locations in 2019 as part of an effort to diversify its products.
By 2022, Dollar Tree had added the items to over 1,500 locations.
“We believe testing additional price points above $1 for Dollar Tree products will enable us over time to expand our assortments, introduce new products and meet more of our customers’ everyday needs,” president and CEO Michael Witynski said in a statement.
“Our brand promise is that customers get great value for what they spend at Dollar Tree. We will continue to be fiercely protective of that promise, regardless of the price point.”
Rick Dreiling, who was the CEO of Dollar Tree before resigning in November, confirmed that the retailer was looking to transform the fortunes of Family Dollar – despite the mass closures.
“We have been on a multi-year journey to transform the organization and fully unlock its intrinsic value,” he said.
“Moving forward with a streamlined portfolio should help accelerate Family Dollar’s transformation and improve the long-term returns of business.”
Around 600 Family Dollar outlets slammed shut in the first half of last year.
And, 370 locations closed their doors after leases expired.
Dollar Tree has undergone a recent leadership change as Jeff Davis stepped down as chief financial officer in December.
He had been in the role since November 2022.
