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MONTREAL – Continuing a household legacy that stretches back more than a century, Dollarama has named the son of their CEO to accept reins at Canada’s largest chain of discount stores.
Neil Rossy, Dollarama Inc.’s 46-year-old chief merchandising officer, will succeed his father, Larry Rossy, 73, at any given time when the Montreal-based clients are flying high, posting greater than expected earnings Wednesday, and forecasting more growth ahead.
“I’m excited to accept helm of the company that’s a part of my DNA,” Neil Rossy said on a conference call.
Larry Rossy said he’s been focusing on a succession plan alongside the organization board for quite some time and can officially step down May 1. He has led the organization since 1973. “I was still being a young man then. I still am, but I think Neil is prepared so there’s no time like the oncoming of a brand new fiscal year to proceed by having an orderly transition,” he said.
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Larry Rossy will remain as executive chairman from the board of directors and intends to continue focusing on company real estate activities and purchasing responsibilities.
“I is going to be there to aid Neil after i am asked my estimation,” he said having a laugh.
Neil Rossy would be the third generation of presidents to inherit a retail chain from his father.
Neil Rossy’s great grandfather, Salim Rossy, fled the Turkish occupation of Lebanon for Montreal as well as in 1910 opened his first department store, S. Rossy Inc. His son George took over in 1937 and led the retailer until his death in 1973 when Larry assumed leadership of the 20-store company.
The network grew to 44 stores by 1992, when Larry opened the very first Dollarama in Matane, Que. After converting all of the locations towards the dollar store concept, Rossy continued to spread out new stores at a furious pace, reaching 1,000 stores in 2015.
I’m excited to accept helm of the company that is a part of my DNA.
Neil Rossy has worked with the company since 1992, and has tried Dollarama’s business, supply chain and day-to-day operations.
“Neil is a proven leader who knows the business inside out and it has contributed tremendously to Dollarama’s growth,” Larry Rossy said.
The leadership announcement came as the company reported much better than expected profit for its fourth quarter and revised its outlook upward for the current year.
Shares climbed 7.46 per cent to $88.91 on the TSX Wednesday following the company increased its quarterly cash dividend to 10 cents per share from 9 cents.
Net profits jumped 25 per cent in the fourth quarter of fiscal 2016, as same-store sales rose nearly 8 per cent to $766.5 million from $669.1 million a year earlier.
Management attributed the improvement to higher product margins, lower transportation costs, and positive scaling of strong comparable same-store sales.
The company says its traffic increase is uniform across Canada, not localized to Alberta and Saskatchewan where challenges in the energy sector could lead shoppers to find cheaper goods.
“I’ve always maintained that our stores are not driven by poor economic conditions,” said Neil Rossy. “During good economic conditions there’s more disposable income, during poor economic conditions maybe people think they’re getting a better deal or they buy things one piece at any given time.”
Earnings of $1 per share were above the mean analyst expectation of 93 cents per share.
The company raised its fiscal 2017 gross margin range estimate by one percentage point to between 37 and 38 percent and its also increased its earnings margin with a percentage point to between 20.5 and 22 percent.
Dollarama also reported it’s experiencing a far more favourable buying environment in China as a result of softer demand, which the company expects will help offset a few of the currency headwinds anticipated within the coming year.
