The company carried out extremely well after a leveraged buyout in 2004, and just recently carried out an extremely effective IPO. In the face of margin pressures, Dollarama just recently took the dangerous choice to move from the single one dollar rate point to numerous cost points.
The extra cost points provide some versatility, however consumers' hunger for buying items priced above $1 has yet to be totally figured out. Dollarama is on a quick development track however continues to be primarily worried about its vulnerability to provide disturbances and to boosts in product expenses from greater input costs. The company appears rather miscalculated based upon a multiples analysis, however significantly undervalued based upon a reduced capital analysis.
PUBLICATION DATE: February 04, 2010 PRODUCT #: 210041-HCC-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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