He's the Welsh billionaire that you have never heard of but his story demonstrates all the attributes required to make it as an entrepreneur.
From Albert Gubay's tough upbringing in North Wales where he learned the value of money to his attitude towards life and his ability to take a risk where other's wouldn't.
He sadly passed away back in 2016 leaving billions of dollars to his beloved Catholic church after a pact he made with God before his business journey began.
The Early Years - Divine Intervention
There is no doubt that the young Gubay started the hard way.
Born in 1928, he was the son of an Iraqi Jewish father who fled to Wales as a refugee from the pogroms (organised massacre of a particular ethnic group) in Iraq. His mother was Irish Catholic and was ousted from her family for marrying someone they did not approve of.
One of the main things that his father instilled in him was an incredible work ethic which was something that stuck with Gubay even in his later years, "I had a very hard father. I had two sisters. He was soft on them and hard on me".
As is the case for so many succesful entrepreneurs, school did not prove to be the fruitful exercise that it is meant to be. The future supermarket owner's experience in the education system was not a positive one as he knew from early on that it would be the world of business that would offer him a path out of poverty. His daily routine at this time consisted on going to school until 4pm then getting ready for work at 5pm on his father's stall.
In his early twenties, after a short spell in the British Navy, Gubay started selling sugar-free confectionary in the North Wales area. In order to start the business he had taken out a loan against his mothers jewellery. The business was a small success as whilst he was earning a living it was not enough to satisfy the ambition of the Welshman.
Disaster struck when post war rationing for sugar stopped in the UK and the business collapsed overnight. Undeterred by the setback Gubay had felt that he had learnt enough about the confectionary industry to start his own supermarket.
It was around this time that the confectionary seller could barely support his wife and children and was living from pay-check to pay-check. In his hour of need, Gubay said that he spoke to God and told him that if he was to become a millionaire he would split half with the Church.
Building the Empire - Value Foods
In 1959 Gubay founded Value Foods in Prestatyn, North Wales. His approach to the business was similar to his no-nonsense personality.
He knew that if he could significantly undercut his competitors on price he would be succesful. The young entrepreneur's pursuit of lower prices was so aggressive that local suppliers refused to do business with him.
The aggressive approach was working and Value Foods were attracting customers, but it wasn't until he studied what other discount stores around the globe were doing that the businessman's life would change forever.
The "Baby Shark" method was being used by German retailers Aldi and even in the US. The method was in its basic form:
- Buy goods from suppliers at a 60% - 90% discount and on a long payment term.
- Sell the goods below cost before the payment on them actually fell due.
- Put the sales proceeds into a high interest account and use the interest acquired to make up the shortfall.
The method was innovative, risky and gave Gubay the edge he required over his local competitors.
Birth of Kwik-Save
Discovering the business model that would allow him to grow his business far beyond what he was currently doing was the "Eureka" moment that the shrewd businessman had been looking for.
In 1965 he founded Kwik-Save and his business career never looked back. The "no frills" approach to his stores where products would not even be stacked on shelves but rather kept in their original delivery boxes, combined with the crazy low prices were the perfect combination for success that Gubay was praying for...quite literally.
His prayers were more than answered as within a few years he was managing 24 stores in North Wales and by 1970 the company was floated on the London Stock Exchange (LSE).
By 1973 the discount chain had been sold for £14million. Gubay subsequently retired and never worked again...
That's what most of us would do but the Welshman had been ingrained with a work hard mentality by his father. Gubay hated the 2 weeks annual vacation that he was legally obliged to take in UK as he loved his work so much.
Growing up penniless he knew the value of money and lived a very frugal lifestyle which he later attributed to the reason he was able to amass huge amounts of wealth.
Branching Out
After becoming a multi-millionaire from the "Baby Shark" method Gubay decided to go global.
He replicated the low cost business model in New Zealand, Ireland and even the USA with tremendous success under the name "3 Guys".
The Christian entrepreneur had mastered the discount business model to the extent that he could apply to other developed economies around the world. The business sold in the 1980s for over £40million but God's plan for Gubay wasn't finished there.
In 1993 while recovering from a back injury the serial entrepreneur decided to enter the health and fitness industry - something which he knew nothing about. Like so many times before where the now father of two had faced a challenge - he embraced it.
He saw potential for a low cost alternative to what was available in the UK during the 1990s. Total Fitness was one of the first low cost gyms with multiple outlets in the country and it was a huge success. The chain was eventually sold for over £120 million in 2001 to a private equity firm.
Later Years
In addition to his endeavours in the supermarket industry and the fitness industry Gubay had always maintained a significant property portfolio.
In 2005 under his Property Development company Portville he was named the top property developer in Wales. He was now worth over a billion dollars.
During his later years he relocated to the tax haven of the Isle of Man where he bought and managed a Country Club.
But what about his "pact with God"? Did he keep true to his word?
Gubay was a man of principle and took the relationship he had with his "maker" very seriously.
Very few have complained if the son of a refugee who had worked hard all his life decided to back out of a promise he had made to God but in 2010, at the age of 82, Albert Gubay pledged 98% of his $1billion fortune to the Catholic Church. Gubay passed away in 2016, aged 87.
Takeaways
The extraordinary life story of Albert Gubay has some key takeaway points that we can learn from today.
- Work hard - Don't let the reason you didn't become succesful at something be because you didn't work hard enough. It is the bare minimum you require to get a business off the ground.
- Take Risk - People that come from nothing will always find it easier to take risk but even when Gubay had made millions in the bank, he took on more risks and started more companies that could have ended badly. The millions of dollars meant little to him and he loved developing his businesses. Leading us on to...
- Love what you do. Imagine enjoying work more than the two weeks holiday you have every year. You are going to achieve more in life if you dedicate your time to what you love rather than at something which is a means to an end.
- Be humble. Gubay never liked the praise and adulation he got for giving his money to charity or to the Church he saw it as an obligation. He had been fortunate to work his way from nothing to earning billions and he never forgot it.
- Keep Trying. The only time you will truly fail is if you give up completely. Gubay had failed businesses and made alot of mistakes. When he found the "Baby Shark" method he knew he was on to a winner and he doubled down on it. Keep going until you find something that works - then go for it.