**Dollar Tree Divests Family Dollar in $1 Billion Sale**

**Dollar Tree has announced the sale of Family Dollar to private equity firms for over $1 billion, marking a significant shift in strategy as it grapples with operational difficulties and industry pressures.**

Dollar Tree has made the decision to sell Family Dollar to two private equity firms, Brigade Capital Management and Macellum Capital Management, for just above $1 billion, as revealed in a statement on Wednesday. This move comes nearly ten years after Dollar Tree acquired Family Dollar for approximately $9 billion, aimed at expanding the reach of both brands. However, Dollar Tree has faced significant challenges in managing Family Dollar's operations, leading to the closure of nearly 1,000 of its locations out of about 8,000 in the past year.

In his announcement, Dollar Tree's CEO Michael Creedon described the sale as a “major milestone in our multiyear transformation journey.” The decision to sell is rooted in recent struggles, including pressures from inflation, rising theft rates, and the expiration of federal pandemic-era benefits. Family Dollar's clientele primarily consists of low-income shoppers in urban areas, who have been most affected by inflationary trends. In contrast, Dollar Tree has a larger footprint in suburban zones and generally attracts consumers with higher disposable incomes.

Additionally, Dollar Tree released its quarterly earnings report, pointing out potential obstacles to growth such as tariffs and trade restrictions that could impede sales and affect pricing and inventory management. The retail sector has been facing hardships recently, with major players like Walgreens planning to shut down about 1,200 stores over the next three years and Party City announcing the closure of all its locations. Just last week, Forever 21’s parent company filed for bankruptcy, reflecting broader competition struggles against online retail.