Australia’s largest discount retailer, The Reject Shop, is entering a new phase of growth following the announcement of a $259 million acquisition by Canadian retail giant Dollarama. The board of The Reject Shop has unanimously recommended that shareholders endorse this deal, which will see Dollarama purchase all outstanding shares at $6.68 each—offering a substantial premium of 112 per cent above the closing share price of $3.15 on March 26.
Dollarama plans to significantly expand The Reject Shop’s footprint in Australia, with ambitions to grow from over 390 stores to around 700 within the next nine years. Steven Fisher, chairman of The Reject Shop, remarked that this opportunity reflects the robust progress made by the company’s team and the potential for future growth.
The acquisition is aimed at delivering both certainty and value for shareholders, with Fisher highlighting the all-cash transaction as beneficial for all parties involved. The board believes that the deal aligns with its objective of enhancing shareholder value and will ultimately be advantageous for stakeholders across the company.
The Reject Shop, which commenced operations in Melbourne in 1981, has since expanded to employ approximately 5,000 staff across Australia. In the last twelve months, the company recorded consolidated sales of $866 million, demonstrating its strong market presence.
Dollarama, which operates 1,601 stores in Canada and has a 60 per cent stake in the growing Latin American discount retailer Dollarcity, is enthusiastic about collaborating with The Reject Shop’s local management team to realise its strategic vision. Dollarama’s chief executive, Neil Rossy, expressed excitement about this new chapter in their international growth journey, emphasising their commitment to leveraging their strengths in value retailing—focusing on superior merchandising, sourcing, and operational skills.
As this acquisition unfolds, both companies look forward to enhancing The Reject Shop’s offerings while ensuring continued stability and growth in the Australian market.