When Medici first invested in Dollarama eight years ago, we were confident in its growth potential while believing it would be geographically limited.
As Pierre-Olivier Langevin, portfolio manager and partner at Medici, explains in a video, the company could hope to open just over 1,000 stores in Canada before being constrained in its growth.
Management defied this scenario and demonstrated their ability to effectively manage the company’s capital: this enabled the company to launch an expansion into Latin America, then Mexico and, soon, Australia. Thus, instead of being held back by the inevitable saturation of the Canadian market, Dollarama implemented a strategy that would allow it to reach 4,500 to 5,000 stores.
What is Dollarama’s recipe for success? Pierre-Olivier emphasizes that the company has now become an essential convenience store for its customers, much like a corner store. Its value proposition evolved, he says, when Dollarama began offering products at prices higher than one or two dollars.
Watch Pierre-Olivier’s complete analysis on YouTube.
