Dollarama plans IPO

Discount retailer Dollarama has unveiled plans to go public.

The company has filed a preliminary prospectus with regulatory agencies about a proposed initial public offering of its common shares, the company said in a release Thursday.

Dollarama has capitalized on consumers' move toward discount shopping during the ongoing economic recession.

On Thursday, Dollarama Group LP reported a 14 per cent sales increase in the second quarter, to $303.4 million from $264.3 million in the same period last year.

Encouraging sign for equity markets

This week, miner Barrick Gold Corp. and airline WestJet Airlines Ltd. announced well-received plans to raise cash with public stock issues, something that was largely unthinkable just a few months ago.

That a recognizable brand like Dollarama is now choosing to go public — one of only a few Canadian companies to do so this year — is something of a vote of confidence both in the economy and equity markets.

In June, Edmonton-based Capital Power Corp. became the first Canadian company to go public in 2009, with a $500-million IPO. It was the first initial public offering on the Toronto Stock Exchange since the middle of 2008.

Founded in 1992, Dollarama sells a variety of items in its 585 stores countrywide for prices between $1 and $2.