Dollarama Chairman Rossy Steps Down After 1,500% Stock RunBy
Dollar-store stock has soared since going public in 2009
Retirement follows Quebec titans Jean Coutu, Lino Saputo
Another Quebec business titan is retiring.
Dollarama Inc. on Thursday announced that founder and Chairman Larry Rossy, 75, will step down from the board after the June 7 annual meeting, remaining chairman emeritus of the Montreal-based company.
Rossy, a third-generation retailer, converted the small Quebec-based family chain to the dollar-store concept in 1992 and took it public in 2009. The stock has soared ever since, gaining almost 1,500 percent, the fourth best-performer in the S&P/TSX Index over that period.
Canadians turn to Dollarama’s ubiquitous yellow-and-green bannered stores for party accessories, kitchenware and seasonal goods like Halloween decorations. The company keeps adding to its more than 1,160 locations, with 60 to 70 openings planned for this fiscal year.
“Larry Rossy is an inspirational Canadian entrepreneur who has transformed Canada’s retail landscape,” Stephen Gunn, the director who will succeed him as chairman, said in the statement.
One of Dollarama’s trademarks is to adopt the same penny-pinching ways as its customers. By staying away from fresh food, keeping costs low and relentlessly testing new ideas, the retailer has avoided pitfalls that tripped up competitors, Chief Financial Officer Michael Ross said in an interview last year.
Dollarama also reported earnings Thursday that beat estimates and said that it’s expanding its distribution center by 50 percent as part of a plan to run as many as 1,700 stores by 2027. The company proposed a three-for-one stock split after a decade of gains pushed the shares to C$155.
Some of Quebec’s most famous and colorful entrepreneurs stepped aside over the past year. Lino Saputo, one of Canada’s richest men, retired as chairman in August with an emotional speech about the humble beginnings of his eponymous dairy empire. Jean Coutu, the founder and chairman of the pharmacy chain that also bears his name, agreed to sell the company to grocer Metro Inc. in October.
Rossy passed the baton as chief executive officer two years ago to his son Neil, who said his dad’s slowdown has been relative.
“He was still at the office every day of the week and I can tell you for a fact that he put in six hours last Saturday as well,” Rossy said on the earnings conference call. “He’s simply taking a step back but that step back brings him closer to normal people.”
Rossy remains the second-biggest Dollarama shareholder, with a stake worth about C$715 million, according to data compiled by Bloomberg.