Dollar Tree is exploring selling Family Dollar

Dollar tree thinking of pruning some of its branches. The discount chain announced Wednesday that it has launched a strategic review that could lead to a sale or spin-off of the Family Dollar chain.

Family Dollar, which was acquired by Dollar Tree in 2015, has been struggling for some time, causing its parent company’s earnings to decline. In March, the company announced plans to close nearly 1,000 stores.

The troubles didn’t end there. Dollar Tree fined more than 40 million USD because of a rat infestation at a warehouse, forcing hundreds of stores to temporarily close. And the chain is also in hot water with OSHA, the Occupational Safety and Health Administration, for putting workers in hot water. Dangerous conditionsincluding blocked fire exits and improper access to fire extinguishers.

Dollar tree stores target middle-income shoppers, while lower-income consumers make up a sizable percentage of Family Dollar’s customer base. However, more and more customers are turning to other retailers, including Walmart And common dollars.

The price of Family Dollar 9 years ago was 8.5 billion USD. If Dollar Tree finds a buyer, it is highly unlikely the company will recoup that investment.

“The unique needs of each banner at this time – the transformation at Family Dollar and the growth at Dollar Tree – led us to the decision to conduct a thorough review of strategic alternatives for our operations. Family Dollar’s business,” Dollar Tree CEO Rick Dreiling said in a statement. declare. “Our goal is to position both the Dollar Tree and Family Dollar banners to move further and faster, while determining whether the unique attention of a dedicated team will benefit both no, while creating value for Dollar Tree shareholders and other stakeholders.”

The company said Dollar Tree has not set a deadline for making a decision and noted that there is no guarantee that the review will result in a sale or other action.

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