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How Ross Stores Made Its Mark in Off-Price Retailing


Nov. 20 2020, Updated 11:56 a.m. ET


Ross Stores (ROST) is one of the major players in the US off-price retail space. This off-price retailer sells apparel, accessories, footwear, and home fashions at 20–60% discounts compared to the prices of similar merchandise sold at department stores.

Headquartered in Dublin, California, the company had 71,000 employees as of January 31, 2015. Ross Stores operates its business through two store concepts. The first is Ross Dress for Less and the second is dd’s DISCOUNTS.

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Tracing the beginnings

The first Ross store was opened in Pacifica, California, in 1950 by Morris Ross. Between 1957 and 1982, Ross operated as a small, family-operated, junior department store chain in the San Francisco Bay Area. In August 1982, Stuart Moldaw, the company’s founder, and a group of investors acquired the chain, which had six stores. They converted these stores to the current off-price format.

Ross Stores went public with an initial public offering (or IPO) in August 1985 and expanded to 121 stores in 16 states by the end of fiscal 1986. The company reincorporated in Delaware in June 1989. It opened its first dd’s DISCOUNTS store in 2004.

Competitive landscape

Ross Stores competes with off-price retailers such as TJX Companies (TJX) and Burlington Stores (BURL). Ross Stores’ rivals also include mid-scale department stores such as Kohl’s (KSS) and Dillard’s (DDS). The company also competes with off-price Nordstrom (JWN) Rack and Macy’s (M) Backstage stores.

Macy’s made its off-price debut with the launch of three Macy’s Backstage stores in the New York area in September 2015. In all, Macy’s will have six off-price stores by the end of 2015.

As of October 20, 2015, Ross Stores’ market capitalization was $20.5 billion. The SPDR S&P Retail ETF (XRT) has 0.9% exposure to Ross Stores. The market capitalization of the company’s peers as of October 20 was:

  • TJX Companies: $49.0 billion
  • Burlington Stores: $3.8 billion
  • Dillard’s: $3.6 billion
  • Kohl’s: $9.0 billion
  • Nordstrom: $12.9 billion
  • Macy’s: $16.8 billion

Series overview

In this series, we’ll discuss Ross Stores’ business model, margins, expansion plans, sales trend, and other aspects such as valuation.


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