Lebanese founded Dollarama has new CEO
Published Wednesday, March 30, 2016 9:01AM EDT
Last Updated Wednesday, March 30, 2016 1:04PM EDT
MONTREAL — Dollarama is turning to the fourth generation of its founding family, with the son of the current chief executive about to take over as CEO of Canada’s largest chain of discount stores.
Larry Rossy — who has led the Montreal-based company through a period of rapid growth since it went public in October 2009 — will continue as executive chairman, but his son Neil Rossy becomes Dollarama’s president and CEO on May 1.
“I’m excited to take the helm of a company that is part of my DNA,” Neil, 46, said Wednesday during a conference call about the company’s fourth-quarter and 2015 results.
Neil Rossy is currently Dollarama’s chief merchandising officer. He’s been with the company since Dollarama (TSX:DOL) was created, and has been a member of its board of directors since 2004.
Larry Rossy, who transformed a family business to Dollarama’s current form in 1992, told analysts that his son is more than ready for this opportunity.
“Over the years Neil has shown strong leadership as one of the architects of our success and has played a key role in the development of our unique business model.”
The new CEO will oversee the company as it seeks to expand to 1,400 stores across Canada. It currently has 1,030 locations and generated $2.65 billion in revenue for the year ended Jan. 31. Its full-year profit was $385.1 million or $3 per share.
Neil Rossy said changes to its product mix and gradual introduction of $3.50 and $4 items in the second half of 2016 will help to partially offset the impact of a lower Canadian dollar while improving its results next year.
Dollarama’s roots date back more than a century when Lebanese immigrant Salim Rossy opened the first S. Rossy Inc. store in 1910 in Montreal.
His son George took the helm in 1937 and converted it to a variety store similar to Woolworth, one of the leading five-and-dime chains of the era.
After Larry Rossy succeeded his father upon his death in 1973, he more than doubled the Rossy network to 44 stores over the next two decades.
The Rossy stores were converted to the Dollarama concept with all items offered for $1 in 1992. The first store outside Quebec was opened in Grand Falls, N.B.
In 2004, Dollarama sold an 80 per cent stake in the company to Bain Capital Partners for a reported $1 billion. That was five years before it went public.
The leadership announcement came as Dollarama reported better than expected revenue and profit for its fourth quarter and raised its quarterly dividend by 11 per cent or a penny to 10 cents per share.
For the quarter ended Jan. 31, sales grew 14.6 per cent to $766.5 million. Comparable-store sales — a key retail measure of sales for stores open at least a year — were up 7.9 per cent from the same period in fiscal 2015. Net profit was $124.8 million or $1 per diluted share, up from $100.27 million or 76 cents per share a year earlier