Dollar Tree’s Family Dollar Business Is Under Strategic Review

Dollar Tree Inc. is undertaking a formal review of strategic alternatives for its Family Dollar segment. According to the company, those alternatives could include a potential sale, spin off or other disposition of the business.

In a statement, Dollar Tree Chairman and CEO Rick Dreiling explained that the unique needs of each of the company’s banners at this time, including the transformation at Family Dollar and growth acceleration at Dollar Tree, has led Dollar Tree to the decision. “Our goal is to position both the Dollar Tree and Family Dollar banners to progress further and faster, and to determine whether the exclusive attention of a dedicated team will benefit both, while creating value for Dollar Tree shareholders and other stakeholders,” Dreiling said.

In March, Dollar Tree revealed that it had initiated a comprehensive review of its store portfolio to address locations that were not aligned with the company's transformative vision. This involved identifying stores for closure, relocation or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors. 

As a result of this review, the company has chosen to close approximately 600 Family Dollar stores in the first half of fiscal 2024. Approximately 370 Family Dollar and 30 Dollar Tree stores will also close over the next several years at the end of each store’s current lease term. 

“Dollar Tree has been on a multi-year journey to help the company fully achieve its potential,” said Dreiling. “Last year, we announced a comprehensive review of the Family Dollar portfolio, including the planned closure of approximately 970 underperforming Family Dollar stores to focus on enhanced investments in remaining Family Dollar stores that present favorable opportunities for long-term growth and transformation, with more attractive returns on capital.”

Dreiling went on to say that the company is already beginning to see progress as it streamlines the Family Dollar banner. Dollar Tree has not set a deadline or definitive timetable for the completion of the strategic alternatives review process.

“At the same time, we continue to aggressively grow the Dollar Tree banner through compelling initiatives like our expanded multi-price offerings, significant planned new store openings across the United States, and accretive transactions like our recent successful bid to acquire up to 170 stores from 99 Cents Only,” Dreiling said.

After more than 370 locations of 99 Cents Only Stores closed rather abruptly in April and went up for sale shortly after that, Dollar Tree acquired rights to 170 of those leases in Arizona, California, Nevada and Texas, as well as the intellectual property of the stores and some of its onsite furniture, fixtures and equipment. The dollar store chain disclosed that some of the locations will rebrand and reopen as early as this fall.

Chesapeake, Va.-based Dollar Tree operates 16,397 Dollar Tree, Family Dollar and Dollar Tree Canada stores across 48 states and five Canadian provinces as of May 4. The company is No. 20 on The PG 100, PG’s 2024 list of the top food and consumables retailers in North America.