Family Dollar has officially separated from Dollar Tree, becoming a standalone company after a $1 billion acquisition by Brigade Capital Management and Macellum Capital Management. This move concludes Dollar Tree’s ownership, which began in 2015 with a $9 billion purchase that failed to meet expectations, leading to the closure of about 1,000 underperforming stores. Last year, Family Dollar reported sales of approximately $13.7 billion.

The acquisition by Brigade and Macellum highlights the ongoing interest in discount retail chains, especially those with a strong presence in urban areas, as consumers continue to seek value amid inflationary pressures. Dollar Tree’s CEO, Mike Creedon, views the divestiture as a key step in the company’s transformation strategy. Following the announcement, Dollar Tree’s shares saw a 6% increase, reflecting investor confidence in the strategic realignment.

The deal, expected to close later this quarter pending regulatory approval, will see Duncan MacNaughton, former president and COO of Family Dollar, taking the helm as chairman and CEO, with Jason Nordin continuing as president. This transition underscores the new owners’ commitment to leveraging Family Dollar’s urban footprint to differentiate it from Dollar Tree’s suburban base, potentially revitalizing the chain’s performance in the competitive discount retail market.

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