The Reject Shop stores will soon change their names and they’ll be replaced with Dollarama. (Source: AAP)
The Reject Shop’s days are officially numbered after more than four decades, but many Australians want the low-cost retailer to hold onto its iconic name. It was recently revealed that The Reject Shop will be slowly converted to Dollarama over the coming years after a $259 million takeover was completed.
A poll of nearly 11,000 Yahoo Finance readers found 74 per cent wanted the name to stay the same rather than adopt the Canadian retail giant’s moniker. But corporate communications crisis specialist Peter Wilkinson told Yahoo Finance a name change could end up being a massive win.
“If they do it cleverly, it can actually be an opportunity for shoppers to come and see what’s changed,” he said.
“Changing the name to Dollarama doesn’t mean they’re going down market or becoming cheaper.
“It’s the same products, but maybe with a couple of specials to incentivise people to come in and try it out.”
The founder of corporate communications consultancy firm Wilkinson Butler said some stores might receive local media attention before they eventually switch over, which could only increase the hype and get more Aussies through the doors.
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He explained that company name changes should never be done when the business is in crisis or suffering from financial woes.
Wilkinson said it’s “very transparent” to shoppers what’s happening and labelled it a “pathetic attempt” at trying to attract new customers.
That won’t be a problem with The Reject Shop, as it’s not embroiled in any scandal at the moment
According to its half-year earnings report released in February, the retailer pulled in $471 million in revenue, which was up 2.9 per cent from the same period a year earlier, and it’s profit margin was also up 3.4 per cent.
“People will accept Dollarama immediately and without a problem as long as it’s not seen as a cover-up,” Wilkinson predicted to Yahoo Finance.
Arguably, one of the most significant name changes across the world in recent memory was when Elon Musk transformed Twitter into X.
It was a chaotic acquisition for the tech billionaire and attracted a lot of headlines.
But Wilkinson put this rebrand in the bad category, but this was largely down to how Elon Musk was viewed rather than the social media company.
“That was associated with a negative event, and that was Elon Musk tampering with the business,” he said.
Crisis specialist Peter Wilkinson believes Aussies will adopt the new name in a heartbeat. (Source: Wilkinson Butler/AAP)
Marketing firm Omnisend found last year that 89 per cent of businesses globally and in the US still referred to X as Twitter, showing how there can be resistance to a name change.
Another bad example Wilkinson pointed to was when TV streaming juggernaut HBO Max rebranded to just Max, before it was eventually reversed back to HBO Max.
He said the HBO name is well-recognised for people across the globe, and dropping those three letters and relying on Max wasn’t a smart move.
In 2011, Virgin Blue transitioned to Virgin Australia in an effort to ditch its low-cost roots and become a more premium brand and attract more business travellers.
Mining juggernaut Adani Australia also changed its name in 2020 to Bravus Mining & Resources. Then-CEO David Boshof said the change was down to “how we feel the organisation is transitioning and for what we represent”.
But Savio D’Souza, valuation director at branding consultant Brand Finance, told Global Data this was an “interesting” case.
“There rightly is confusion about the brand name; as a third party without an understanding of how the name was arrived at, it appears to have been done without proper consultation with its key stakeholders and the general informed public,” he said.
When news broke of the name change earlier this week, it was a mixed bag for many shoppers.
Some of the sentiment revealed Dollarama could face an uphill battle by changing the name of an iconic business that’s been around for 44 years.
“No point in changing the name,” wrote one person. “In Australia, it’s always been The Reject Shop and Aussies will still call it that because that’s what we know it as. Dollarama sounds like something out of The Simpsons.”
“No, leave it as it is, it’s the name we all know it by, not some foreign name. If they change it, the store won’t be the same,” commented another.
A third said: “Why change when it’s not broken?”
Others weren’t too mad at the concept of Dollarama, but some were cheekily hoping it would be Aussiefied just a little.
“If Dollarama is the Canadian name, then surely Dollarydoos should be the Australian version?” said one keen shopper.
“When Dollarama comes here, they should change their name in Australia to Dollarydoodads. Fits the best of both worlds, keeps the Dollarama name, but at the same time has that Aussie twang to it with Dollarydoos,” added another.
Dollarama will be the new name for The Reject Shop stores across Australia over the coming years. (Source: Getty) · Vince Talotta via Getty Images
The low-cost Canadian retailer bought The Reject Shop earlier this year for $259 million.
As part of this takeover, Dollarama is keen on seeing its branding slapped onto Aussie stores over the coming years.
Dollarama CEO Neil Rossy revealed in a recent call with analysts that it won’t just be an aesthetic change that shoppers will notice.
“We are now starting to selectively phase in Dollarama products across categories,” he said.
“Along the way, we will be simplifying the price point structure, including lowering the current pricing ceiling.”
The name and branding change-over will be “gradual” and “methodical” as Dollarama is keen on taking a “slow and steady” approach so that it’s not as much of a shock.
The Reject Shop’s days of looking like this are numbered as its parent company, Dollarama, has revealed major changes are already happening. (Source: AAP)
The conversion will take at least until the end of the 2027 financial year to be completed, and each Reject Shop will change its name once it contains a “critical mass” of Dollarama products.
“Our plan is to convert store layouts to deliver that convenient and consistent shopping experience we are recognised for, and which directly supports our merchandising strategy,” Rossy said.
There are currently just under 400 The Reject Shops in Australia, and Dollarama CEO wants to take that number to 700.
But he’s not expecting it to be an immediate slam dunk.
“As this is a multi-year journey, we don’t expect the business to materially contribute to our profitability until a few years down the road when the heavy lifting is behind us,” he said.
“As a team, we are very excited about these projects and the opportunities that lie ahead across our growth platforms in Canada and Latin America and now Australia to the benefit of all our stakeholders.”
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