Discount-store giant Dollar Tree is exploring a potential sale or spin-off of its troubled Family Dollar business, just three months after it said it planned to close roughly 1,000 of that chain's underperforming stores.

The Chesapeake, Virginia-based chain said on Wednesday that it had initiated a formal review of its options regarding Family Dollar, the company it bought for $9 billion in July 2015.

"The unique needs of each banner at this time — transformation at Family Dollar and growth acceleration at Dollar Tree — lead us to the decision to conduct a thorough review of strategic alternatives for the Family Dollar business," Rick Dreiling, chairman and CEO of Dollar Tree, said in a statement. "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.”

Dollar Tree's efforts to turn around the Family Dollar chain following the merger have faltered, by its own admission.

“Dollar Tree has been on a multiyear journey to help the company fully achieve its potential,” Dreiling said.

In March, following a strategic review that began last year, Dollar Tree announced it was closing roughly 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 said.

At the time, the Family Dollar shutdowns marked the most number of stores in a U.S. retail closing announcement this year, according to Coresight Research.

Dollar Tree is "already beginning to see progress in this targeted strategy in the streamlined Family Dollar banner," according to Dreiling.

In the quarter ended May 4, Dollar Tree had 16,397 total stores, with 8,520 of its namesake locations and 7,877 Family Dollar sites. In that first quarter, 513 Family Dollar stores were shuttered.

Dreiling said Dollar Tree continues to grow, fueled in part by its recent successful bid to acquire up to 170 stores from 99 Cents Only, which closed all its locations and filed for Chapter 11 earlier this year. Dollar Tree purchased 99 Cents Only store leases in Arizona, California, Nevada and Texas.

Dollar Tree has not set a deadline or definitive timetable for the completion of the strategic alternatives review process regarding Family Dollar.

The Family Dollar store closings discussed in March don't mark the first round of downsizing at the chain by parent Dollar. In 2019, for example, Dollar Tree said it was closing 390 Family Dollar locations, renovating at least 1,000 of the chain's stores, and rebranding another 200 to Dollar Tree banners.

Dollar Tree has retained J.P. Morgan Securities as its financial adviser and Davis Polk & Wardwell as its legal adviser to assist in this review.