TORONTO -- Montreal-based discount retailer Dollarama Inc. is more than doubling the number of stores it runs in Ontario, with 60 new outlets. Family-owned Dollarama will soon have about 100 stores in the province after the company opens in all 60 locations it bought when the BiWay chain collapsed last fall, said Larry Rossy, president of Dollarama Inc.

About half the new stores are already operating and the other half will open by the summer, covering an area from Sudbury to Windsor and including the Toronto region.

Dollarama will then have more than 300 stores in Canada, including 160 in Quebec and 40 in Prince Edward Island, Nova Scotia and New Brunswick.

Rossy said Dollarama has about enough stores in those four provinces but still has room to expand in Ontario.

"The opportunity for good locations doesn't happen all the time and it came in a bunch with the BiWay demise, so we took advantage of that," Rossy said in an interview.

Dollarama stores sell items for $1 apiece. That includes cards, party favours, toys, household and kitchen items and other general goods.

While BiWay floundered for years in some of those locations, retail consultant John Winter, of John Winter Associates Ltd., says the dollar stores' prospects are brighter.

"I think they will do much better," Winter said. "It's a wonderful concept, it's a serendipity shopping experience. What can I get for $1? Even if you make the wrong choice, you've only lost a dollar."

Dollarama is owned by the Rossy family of Montreal and was opened in its current form in 1992. But for generations previously, the family ran five-and-dime stores starting with the first Rossy General Variety shop in Mont-Jolie, Que.

"It's truly remarkable what can be sold for a dollar," Winter said. "It's the five-and-dime of this millennium, as Woolworth was in the 1920s."

The leases to BiWay's 260 stores were put up for sale after its parent, former retail giant Dylex Ltd., filed for bankruptcy protection last August, laying off 3,400 workers. At one time, Dylex owned Tip Top Tailors, women's retailer Fairweather and casual clothing chain Thriftys, among others.

Dollarama, which didn't disclose how much it paid for the BiWay sites, isn't the only dollar-store operator with expansion plans.

Toronto-based Denninghouse Inc. - operator of Buck or Two or Dollar Ou Deux banners, with more than 300 stores across the country - bought six to eight leases from BiWay, said Robert Harlang, a senior vice-president at Richter & Partners, a consulting firm in charge of Dylex under bankruptcy.

Denninghouse plans to open 35-40 stores in 2002 and enlarge some locations.

Although Dollarama's expansion move in Ontario is dramatic, that isn't a sign the company's next moves will be into Western Canada, Rossy said.

"I think there's more room in Ontario," Rossy said. "I would rather cover the areas we're in properly before I think about going further West."

But as dollar stores - like coffee shops - sprout like mushrooms on street corners, the concern is that soon there will be too many.

"They should do well," Winter said. "The only restriction is that as more and more get built they will cannibalize the sales of existing outlets. But clearly, both Buck or Two or Dollarama don't think they've reached saturation yet."

That time is approaching, Rossy said. "It's starting to come to a saturation point. I don't think many more people will come in between two dollar stores.

"Like any business, the cream will come to the top . . . and hopefully we're part of the cream."