Dollar Tree has decided to sell its struggling Family Dollar business for significantly less than its acquisition cost nearly a decade ago. After contemplating the sale of Family Dollar, Dollar Tree announced on Wednesday that it would sell the business to two private equity firms for $1 billion. Family Dollar had 7,600 stores as of February 1. In 2015, Dollar Tree outbid its competitor Dollar General to acquire the Family Dollar discount chain for $8.5 billion. However, Dollar Tree has struggled to differentiate Family Dollar from competitors like Walmart and e-commerce platforms, while also facing challenges such as inflation. In 2024, Dollar Tree announced plans to close 1,000 Family Dollar stores after missing profit targets. The Family Dollar business incurred an operating loss of $1.8 billion in Dollar Tree’s latest fiscal year, which ended February 1. Dollar Tree also recorded substantial paper losses for the fourth quarter related to Family Dollar. CEO Mike Creedon characterized the sale as a ‘major milestone,’ stating that Dollar Tree intends to open new stores and pursue growth strategies. The sale to Brigade Capital Management and Macellum Capital Management is expected to close within 90 days. Dollar Tree anticipates $804 million in net proceeds from the sale and $350 million in tax benefits from the losses on the sale. — news from The Washington Post