Aniket PujariA sign is posted in front of a Dollar Tree and Family Dollar store on March 13, 2024 in Rio Vista, California.
Justin Sullivan | Getty Images
Dollar Tree said on Wednesday it will sell its Family Dollar business to a consortium of private-equity investors for about $1 billion, as the struggling discount-store chain looks to restructure its business and cut costs.
The discount-retail chain, which Dollar Tree bought in 2015 for about $9 billion, will be acquired by Brigade Capital Management and Macellum Capital Management.
Shares of Dollar Tree were up 6% in premarket trading.
The company, which is in the midst of a restructuring, first said in June it was exploring options, including a sale, for its Family Dollar business, as it struggled with competition from big-box retailers such as Walmart, and online retailers including Amazon, Shein and Temu.
It appointed a new CEO in December after industry veteran Rick Dreiling decided to step down following a two-year stint due to health concerns.
Interim CEO Michael Creedon replaced Dreiling, and was tasked to lead a turnaround. Dollar Tree also named former Tyson Foods executive Stewart Glendinning as its finance chief earlier this month.
Excluding sales from the Family Dollar banner, the company posted net sales of $5 billion for the quarter ended February 1, a marginal rise from $4.96 billion reported a year ago.
Reuters reported in February that private equity firms including Brigade Capital had expressed interest in buying Family Dollar.
The Wall Street Journal reported about a possible deal earlier on Wednesday.
