Dollarama wants to continue its expansion abroad with Mexico as its next destination. To achieve this, the company is strengthening its partnership with the Latin American retailer Dollarcity, which plans to open a first store in this country in 2026.

Dollarama announced Wednesday that its stake in Dollarcity increased to 60.1% following the acquisition of an additional 10% stake, in exchange for 6,060,478 common shares of Dollarama.

As part of this purchase, the Montreal retailer has agreed with Dollarcity’s founding shareholders that Mexico will be the next market for implementation.

“Mexico has a population of nearly 130 million and a vibrant retail market. We believe local consumers will be interested in Dollarcity’s value proposition, as has been the case in our current countries of operation in Latin America,” said Dollarama retailer President and CEO Neil Rossy. during a call with analysts.

The Montreal-based company will indirectly hold an 80.05% stake in the Mexican portion of the business, while Dollarcity’s founding shareholders will own 19.95%.

Dollarama acquired an initial 50.1% stake in the Latin American retailer in 2019. This followed an agreement signed a few years earlier, under which the Quebec company was to share its business expertise and provide procurement services.

Dollarcity had 547 stores across Colombia, Guatemala, El Salvador and Peru at the end of March. Rossy says Dollarcity has more than tripled its sales and increased its presence in key Latin American markets.

Entry into the Mexican market will be done with the same discipline and caution as during the expansion in Colombia and Peru, he affirmed.

Dollarama also acquired an option to purchase an additional 9.89% interest in Dollarcity at any time, but no later than December 31, 2027.

The deal came as Dollarama reported profit of $215.8 million, or 77 cents per share, for its quarter ended April 28, up from $179.9 million, or 63 cents per share, a year earlier.

Sales for the quarter totaled 1.4 billion, up from 1.3 billion in the same quarter last year.