Dollar Tree to sell Family Dollar for $1 billion a decade after buying it for more than $8 billion

Dollar Tree on Wednesday said it is selling Family Dollar for $1 billion to a pair of private equity firms, a decade after it bought the discount chain for more than $8 billion.

In a statement, Dollar Tree said private equity firms Brigade Capital Management and Macellum Capital Management will purchase Family Dollar, with the discount chain slated to remain headquartered in Chesapeake, Virginia. 

Although both Dollar Tree and Family Dollar cater to low-income shoppers, Family Dollar locations struggled to gain traction, prompting the parent company last year to announce plans to shutter about 1,000 locations. Family Dollar also faces fierce competition from Walmart and other large retailers, while a rat-infested warehouse spurred a slew of negative headlines.