- Canadian-based Dollarama Inc. officially closed its acquisition of Australia’s The Reject Shop
- Altogether, the acquisition is an all-cash deal worth approximately C$233M
- The Reject Shop operates over 390 stores nationwide and employs over 5-thousand staff
- Alpha Ba, “Over the past 5 years, Dollarama’s stock has returned approximately 30% annually.
This article is a journalistic opinion piece which has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Montreal Retail Giant Dollarama Completes a C$259M Acquisition of The Reject Shop
Dollarama Inc. (TSX: DOL), Canada’s premier value retailer, officially closed its acquisition of Australia’s The Reject Shop on July 30, 2025, in an all‑cash deal worth approximately A$259 million (C$233 million) The takeover, approved by The Reject Shop’s board and its major shareholder (Kin Group, ~20.8% stake), offered A$6.68 per share—a 108–112% premium over historical prices
Headquartered in Melbourne, The Reject Shop operates over 390 stores nationwide, generated about A$852–866 million in sales in 2024, and employs over 5,000 staff.
Alpha Ba Commentary: A Strategic Fit with High Returns
To begin with, Alpha Ba, Chief Officer at Pillow Investments, a global investment consulting firm based in Toronto defines three core dimensions of the acquisition. Firstly, Dollarama has delivered superior investment performance, seized a transformative opportunity in Australia, and now aims to drive growth through efficiency gains.
Superior Investment Performance
To illustrate superior investment performance, Ba states,“Over the past five years, Dollarama’s stock has returned approximately 30 per cent annually, more than double The Reject Shop’s 12.5 per cent,” noting Dollarama’s operational efficiency and capital discipline.
Alpha Ba, Partner & Chief Investment Officer, Pillow Investments
In addition, Ba points out, “We are confident that Dollarama can instill those superior management skills into The Reject Shop.”
Dollarama’s Transformative Opportunity in Australia
At this point, with the acquisition now closed, Dollarama gains an immediate platform of nearly 400 stores. In addition, The Reject Shop’s performance—sales at A$852 million in 2024—offers foot traffic and reach if re‑energized properly. Ba continues: “The Reject Shop had been dogged by tough competition and low profitability due to poor merchandise selection and high shoplifting/shrinkage.”
Dollarama: Efficiency Gains as the Growth Engine
Dollarama plans to revitalize the business by leveraging improved sourcing, boosting private‑label penetration, and opening new stores at a low capital cost of under A$100K each.
To further illustrate this, that expansion targets include growing store count to around 700 by 2038 — nearly doubling reach over the next decade.
“Dollarama plans to improve margins at the Reject Shop by leveraging its global sourcing, expanding its private label footprint and opening new stores in a cost-effective way.”
Alpha Ba, Partner & Chief Investment Officer, Pillow Investment
Another key point Ba makes is flagging the risks of the situation. These include, Australian retail volatility, cultural integration challenges, and product localization needs.
Dollarama: Alpha Ba’s Final Remarks
To further his analysis, Ba notes this acquisition offers Dollarama a launchpad into the Asia–Pacific region. While at the same time, providing a real-time lab to scale its value-retail playbook.
“Over the past 5 years, Dollarama’s stock … more than double … reflects Dollarama’s superior operating performance and capital efficiency.”
Alpha Ba, Partner & Chief Investment Officer, Pillow Investments
“The target is for Dollarama too dramatically improve the Reject Shop’s efficiency … expansion plan to 700 stores by 2038.”
To conclude, If Dollarama executes its sourcing and merchandising strategy in Australia, it could unlock significant value. This move may reshape the country’s discount retail landscape. It could also boost long-term returns for shareholders.
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