Dollar Tree has agreed to sell Family Eplar to a group of private equity investors for around $ 1 billion.
This would put an end to the almost annual search of the chain for potential buyers for the troubled discount store chain.
But experts warn that this could mean that further closures for Family Dollar, which has already drawn up around 1,000 locations to close the US.
Dollar Tree mainly has stores in more middle class and suburbs locations, while Family Nollar shops are largely located in large cities.
Party supplies, crafts and decorations are important items for dollar tree shoppers, while Family Dollar sells groceries, cleaning products and other supplies with a reduction.
Dollar Tree bought 66-year-old Family Mollar in 2015 for more than $ 8 billion, but it has difficulty integrating the chain.
It is not only struggling with competition from Big -Box retailers such as Walmart and online retailers, including Amazon, Shein and Temu – but the chain is also plagued by crime, shoplifting and neglected stores.
Shares of Dollar Tree jumped no less than 6 percent premarket handling of the back of the news that the Family Dollar discharged to Brigade Capital Management and Macellum Capital Management, Reuters reported.
Dollar Tree has agreed to sell Family Mollar to a group of private equity investors for around $ 1 billion
Dollar Tree CEO Mike Creedon
“The first thing Private Equity will do is judge the chain,” Neil Saunders, director of Globaldata, told DailyMail.com.
“Stores can be closed from this to get rid of loss stores.”
“It is really 'addition through subtraction', since Family Dollar had been a consistent weight in the top line performance, margin and management time,” Evercore analyst Michael Montani told Reuters.
With the sale of discretionary items with a higher margins, such as home decoration and clothing, the family collection chain struggled because consumers were reduced the expenses due to inflation.
Last year, Dollar Tree announced that it was about 1,000 Family Dollar stores to renew its struggling activities in an attempt.
It came weeks after the company was beaten with a fine of $ 41.7 million after it was found guilty of selling food, cosmetics and personal care products from a warehouse affected with rodents.
“This dramatic clearance is the Coup de Grâce in the rather failed acquisition of the family chain, which Dollar -Tree caused nothing but hassle because it was completed in 2015,” Saunders told The Associated Press at the time.
“In short, almost ten years later, Dollar Tree Sekt still in the ruins it inherited and could not fully turn around,” he said.
As a result of the already planned stores that had closed themselves in the US, Saunders said on Wednesday that there is unlikely that there will be further 'mass closures' in the chain.
Mike Creedon, CEO of Dollar Tree, who took on the top role in December, said that the sale will enable the company to concentrate on its core activities.
“This is an important milestone in our multi -year transformation trip to help us fully reach our potential,” he said in a statement.
Experts warn that the sale can mean further closures for Family Dollar, which has already drawn up around 1,000 locations to close the US
“The first thing Private Equity will do is judge the chain,” Neil Saunders, director of Globaldata, told DailyMail.com
Party supplies, crafts and decorations are important items for dollar tree shoppers, while Family Dollar sells groceries, cleaning products and other supplies for a reduction
Despite the sale of family level as good news for investors, Dollar Tree also outlined how rates will probably damp things.
The company said it expected an impact of around $ 20 million a month from the new rates of President Donald Trump on Canada, China and Mexico imposed in March.
Excluding the turnover of the Family Dollar Banner, the company placed the net turnover of $ 5 billion for the quarter ending on 1 February, a marginal increase of $ 4.96 billion reported a year ago, Reuters reported.
“Dollar Tree's similar sales performance is at best inconsistent despite the efforts of the company to aggressively renovating stores and to roll out multi -price points,” Mari Shor, senior stock analyst at Columbia Threadneedle Investments, told The Outlet.
