If you grew up in Lebanon or you’ve lived long enough in Lebanon, you probably know by now that we have this tendency to conceit what’s very cheap in cost. The term erkhiss has been even used to minimize the value of a person. We do actually have theses saying you hear around that translates into “He/she is not worth a frank” and “He, as a whole, values nothing much.”
The Lebanese Rassy family though had an opposite perspective that has proven not only right but totally genius, as their billion-income operation was dubbed by Canadian business gurus and news across Canada. One can’t logically say otherwise, anyway, when we come to witness the empire they have built from the “cheap.”
Salim Rassy, who came to later write his family name as Rossy, emigrated from Lebanon to Canada in 1910 with his wife, and opened a small store, S. Rossy Inc., on Craig Street in Montreal, Quebec. Over the next two decades, his family expanding with 10 children, so did his business as all his children become involved, and the S. Rossy Inc. operations gradually expanded.
By 1937, his son George Rossy took over the presidency of the business and transitioned the model to a variety-store, leading a gradual expansion of 20 stores until his death in 1973. The family business legacy, in operation and acumen, went on with Larry, George’s son, who assumed leadership and doubled the store network to 44 locations by 1992.
It is at that stage of the family operation that Larry came up with the simple concept of a store offering all items for CA$1.00 or less. And so, in April 1992, he transformed one of the existing stores, in Matane (Quebec), giving birth to the first DOLLARAMA in the country.
The move proved highly successful and went to be applied to all their existing chain stores, to then expand to the opening of even new stores. From there, Dollarama crossed over the Quebec’s frontier, opening one store in Grand Falls, New Brunswick, in 1992, and one in Ontario in 1994.
Those living in Canada know how in-demand is Dollarama for their good products selling so below the market price. And when we say “good products,” we mean even some brands found in expensive stores. A chain like that can’t possibly stop at just one and two in bustling cosmopolitan cities.
So it was no surprise that the Canadian province of Ontario witnessed in 2001 a massive expansion of the Dollarama chain when the Rassy company acquired 60 locations from a retail chain that went bankrupt.
By then, Dollarama’s name was beyond needing an introduction. It is the first place people head to for a good financial management of their personal and household requirements. From stationery, craft items, cooking tools, tableware, cleaning products, and toiletries to snacks, can food, beverages, and you name it.
Two years after its Ontario’s expansion, Dollarama opened its first store in the province of Manitoba (2003) and went increasing its distribution and warehousing capacity, opening two warehousing facilities in Montreal, Quebec.
A private equity group called Bain Capital approached Larry Rossy to invest in the operation and “support” its continued growth. Bain Capital ended purchasing a majority stake and, indeed, favored an even larger expansion into Western Canada, aiming towards serving customers from coast to coast.
The new expansion started with stores in the provinces of Alberta and Saskatchewan in 2005, and in the provinces of British Columbia and Newfoundland in 2006, and until Dollarama became present in all the provinces of Canada with a total count exceeding 460 stores.
That brought the need to open a larger distribution center in 2006, which took place in Montreal, Quebec, in the vicinity of the company’s warehousing facilities.
By 2007, a symbolic milestone was recorded for Dollarama with the opening of its 500th store in the Canadian capital of Ottawa. Dollarama opened accordingly an additional warehouse in Montreal and relocated its Head Office to the Town of Mount-Royal (Montreal).
You might be wondering by now how such a business operation could remain sustainable with the world economy changing, and items’ values increasing exponentially.
After all, one Canadian dollar for a good cooking pan or a pack of 6 drinking glasses or a Pantene shampoo or a painting canvas sounds totally insane and practically incredible; especially in Canada in 2009.
The company with their new majority-partner had to see to that. So, they increased their prices to…. CA$1.25 up to CA$2.00 with many items remaining at CA$1.
You got to give it to them. Keeping their products ridiculously and bless-fully low, all while increasing the quality and variety, is no short of genius. That same year, on October 16, 2009, Dollarama entered the Toronto Stock Exchange under the symbol DOL.
We are not done yet, because Dollarama isn’t still, not at that stage of its journey. Hold your breath, there is more coming!
In 2011, the now well-established Dollarama company is so proving its disciplined execution of growth strategy and value for its shareholders that when Bain Capital sold its stake that year, the operation didn’t shake, on the contrary. Canadian Business News headlined its report that year, “The genius of Dollarama, How a small Quebec-based chain became a billion-dollar retail empire — one buck at a time.”
In fact, in 2012, Dollarama was celebrating the opening of its 700th store in Canada and offering even greater selection and riveting value at a range price not exceeding CA$3.00. Customers continued to stream into their stores more than ever.
This is when the founding management was approached with a business request: To offer its business expertise beyond Canada, in El Salvador. Dollarama hence entered into a “licensing and sourcing services agreement” in 2013 with Dollar City, a value retailer in El Salvador looking to expand in Latin America. The Dollarama model in new markets proved very successful to-date.
Back to how things were accelerating in Canada, Dollarama celebrated in 2015 the opening of its 1,000th store, all while aiming to reach 1,400 stores, and selling products from CA$1 to CA$4.00 maximum (to date).
That same year, the Rossy Family was listed #59 in “The Top 100 Richest Canadians” with a net worth of CAD 1,497,059,518.- (Ref. Canadian Business, Jan. 2015)
In 2016, founder Larry Rossy, aged 73 at the time, became Executive Chairman, handing over the presidency and CEO position to his son Neil Rossy, aged 46. Neil earned big time the position, having contributed to nearly 25 years of Dollarama’s growth and profitability.
That same year, a new 500,000 sq.ft Dollarama warehouse opened in Montreal to accommodate the ongoing growth. In March 2016, the Canadian news read, “Dollarama retailer hikes dividend on higher earnings, raising dividend 11 percent as sales and profit beat expectations.”
By 2017, recognized as a Canadian value retailer and having revised the market potential, Dollarama management planned for a target of 1,400 to 1,700 stores by 2027, attaining already by the end of 2017 a count of 1,135 stores across Canada.
Credit cards started to be accepted chain-wide, offering even more facilities to its customers, and an e-commerce website opened more recently, selling select merchandise “by the case full” with delivery facility for the province of Quebec.
Extraordinary beyond words, as he has proven, Larry Rossy would come to step down as executive chairman in 2018 after an amazing 1,500% stock run, “the fourth-best performer in the S&P/TSX Index over that period,” as per BNN Boomerang (March 2018).
Larry Rossy became then Chairman Emeritus and acting as a mentor and advisor to the management team. The Lead Director of the Board of Directors since 2009, Stephen Gunn, replaced him as Chairman of the Board.
While our narrative of this remarkable Lebanese family and their outstanding business empire ends here, Dollarama’s story doesn’t by all means. It continues to progress, currently doubling the size of its already massive distribution center in the Town of Mount-Royal (Montreal).
For decades now, Dollarama remains a unique value destination, and we can’t be prouder. Recognized as a great philanthropist, Larry Rossy was made Officer of the Ordre de Quebec in 2014.
In fact, to cite a few of his humanitarian endeavors, his Rossy Family Foundation and partners pledged CA$58 million in May of 2013 to improve cancer care for Quebecers. Larry himself led the way with CA$30-million gift, getting a standing ovation from the people gathered at Redpath Hall of McGill University at the announcement.
In 2015, he receives the Management Achievement Award 2015 from Desautels Business Management Faculty of the prestigious McGill University, and in 2016, he became a member of the Desautels family of alumni.
Let’s never again assume that cheap is ‘unworthy to consider’ because, as you now know, it could be the whole reason-to-be and the fueling-engine of a billion-dollar empire!