Dollar Tree has announced that it is exploring a potential sale or other options for its Family Dollar store chain.
Last year, the discount store hinted at this move by conducting a thorough review of its Family Dollar portfolio and closing nearly 1,000 underperforming stores under both brands. Meanwhile, the company also opened around 1,200 new Dollar Tree-Family Dollar combination stores in rural areas with limited retail options, with plans for more in the future.
It remains uncertain if the plans for additional combination stores are still on track or what would happen to them if a sale or spinoff of Family Dollar proceeds. Dollar Tree has not provided a timeline for when the strategic review of Family Dollar will be finalized.
Dollar Tree CEO and Chairman, Rick Dreiling, stated, “Our objective is to position the Dollar Tree and Family Dollar banners for further advancement and determine if dedicated attention from a specific team would yield benefits for both, creating value for Dollar Tree shareholders and stakeholders.”
In 2015, Dollar Tree acquired Family Dollar after winning an $8 billion bidding war against Dollar General. However, financial reports indicate challenges in integrating the brand into its operations.
In a significant shift, Dollar Tree recently raised its base price for in-store items for the first time in 35 years, moving away from its traditional $1 pricing structure. The retailer is focused on expanding its Dollar Tree banner and has acquired 170 stores in Arizona, California, Nevada, and Texas from the bankrupt 99 Cents Only chain to reopen under its brands.
