Dollar Tree to Sell Family Dollar to Private Equity Firms for $1B

Dollar Tree is set to sell its Family Dollar chain of stores to private equity firms Brigade Capital Management and Macellum Capital Management for just over $1 billion, the discount store announced Wednesday.

Dollar Tree, whose stores often operate in middle-income suburbs, acquired the Family Dollar chain, which largely caters to more urban areas, in 2015 for roughly $9 billion, the Wall Street Journal reported.

But factors like inflation and shoplifting forced Dollar Tree to close roughly 1,000 Family Dollar stores in 2024, and with shares down about 10 percent so far in 2025, Dollar Tree began a review of its struggling chain last summer, the WSJ reported.

The company said the sale of Family Dollar to Brigade and Macellum “best unlocks value for Dollar Tree shareholders and positions Family Dollar for future success,” according to the announcement. It would also allow Dollar Tree to make more investments, like its deal last year to acquire almost half of the 99 Cents Only stores in the country.

“This is a major milestone in our multiyear transformation journey to help us fully achieve our potential,” said Dollar Tree CEO Mike Creedon Jr., who was appointed the dollar store’s permanent CEO in December.

“With the support of a dedicated team, Family Dollar will be able to strengthen its commitment to providing affordable and essential goods to customers so they can do more with less,” Creedon added.

As part of the deal, Duncan MacNaughton, former president and chief operating officer of Family Dollar, will become chairman, while Jason Nordin will continue on as Family Dollar’s president, according to Macellum CEO Jonathan Duskin.

“Family Dollar has a tremendous potential to grow and succeed as an independent company, and I am honored to be able to play a role in helping the company fully realize that opportunity,” MacNaughton said in a statement.

The transaction is expected to close during the second quarter of 2025, Dollar Tree said. J.P. Morgan Securities is serving as financial adviser, while law firm Davis Polk & Wardwell will serve as legal adviser to the company.

Wells Fargo (WFC), RBC Capital Markets and WhiteHawk Capital Partners are providing financing for the deal, according to the announcement.

The news comes as dollar store chains across the country — which have largely upped their base prices from just $1 — face a drop in profits. The chains were already struggling to deal with inflation, shoplifting, competition from big-box stores and online marketplaces like Temu before recently imposed tariffs by the current presidential administration made their future even tougher.

But Brigade and Macellum executives said they intend to change the course for Family Dollar.

“Since 1959, Family Dollar has served its customers by offering convenient, high-quality products at a great value, and the business is a pillar in communities across the United States,” Matt Perkal, partner at Brigade, said in a statement.

“We look forward to continuing and enhancing Family Dollar as its own enterprise, which we are confident will drive greater success for the business and value for all of Family Dollar’s stakeholders, including employees, customers and communities,” Perkal added.

And both funds have made moves for brick-and-mortar retailers recently. Macellum recently lost an activist investor campaign to replace 10 board directors at department store Kohl’s, while Brigade invested in a post-bankrupt Guitar Center and lost a bid to take over Macy’s with Arkhouse Management in a $6.6 billion deal.

Isabelle Durso can be reached at idurso@commercialobserver.com.