With the demise of FW Woolworth's, you can't find the classic "five-and-dime" anymore. But for Angelenos there is an inflation-adjusted substitute the 99 Cents Only Stores Inc. chain.
Even as some of the great retailing names of America crumble, the 49-store City of Commerce discounter is charting expansion, flush with the pennies and dollars garnered from leagues of shoppers.
"We get about 2,000 shoppers a day here," said Mavid Ali, manager at the 99 Cents Only Wilshire Boulevard store, just east of Beverly Hills. "There is always people at the registers, waiting to check out."
Indeed, during a recent lunch hour, the aisles were bustling with bargain hunters in the 22,000-square-foot store, which is No. 1 in sales for the chain, with more than $7 million annually.
Pushing all-plastic purple shopping carts, customers view a bewildering grab bag of merchandise everything from toy plastic boats to leather gloves to liquid detergents to pretzels.
The store's popularity extends to Wall Street; in fact, it's proving to be one of the most successful new local issues. The company went public at $14.50 a share in May 1996, and was trading last week in the $32-a-share range.
"We are small fish in a big pond, being on the New York Stock Exchange," said Eric Schiffer, 99 Cents Only Stores senior vice president of finance. "We don't have an investor relations firm. The stock market is still getting to know us."
Wall Street is likely to warm up quickly, considering the company's financials. In its second quarter ended June 30, it reported net income of $4.4 million, compared with $3.1 million for the like period a year earlier. Revenues were $53.8 million vs. 43.2 million.
For all of 1996, net income was $13.7 million, compared with $9.6 million a year earlier.
The company's goal: Annual revenue and earnings growth of 20 percent for the forseeable future.
"We are still small, and the amount of merchandize (at the wholesale level) is still huge. We don't foresee problems growing. We will open nine stores this year," said Schiffer. "This is by no means easy, but it is not rocket science either."
The 99 Cents Only strategy rests on rock bottom prices prices that are achieved by lower mark-ups than other retailers, and by constant bargain-hunting by the chain's buyers.
The chain was founded in 1982 by David Gold, who is the company's chairman. The Gold family had been in retailing in downtown's Grand Central market since the 1940s. When David Gold took over the operation, he noticed that items priced at 99 cents tended to sell better than they did at 98 cents or $1.
"There was something about that number that helped move the product," said Schiffer. "He always wanted to start a company where everything sold for 99 cents."
Finally, 15 years ago, Gold started a 99 Cents Only Store on La Tijera Boulevard, near the Los Angeles International Airport.
The company has never taken on debt, and has steadily expanded, leading to the decision to go public last year, Schiffer said. Annual sales average $3.7 million per store, he said.
Though 99 Cents Only Stores keeps tabs on over-runs and close-outs, it actually buys 60 percent of its product through regular channels, direct from manufacturers.
The 99-cent paint brushes it buys in China, for example, are a regular item, not a close-out.
"We buy those by the container-load, direct from the manufacturer," said Schiffer. "We are getting better at buying. We used to buy more often from importers, but now we more often go direct to the manufacturer."
Schiffer conceded that a recent article in the London-based Financial Times was perhaps a bit bold when it stated that one benefit of shopping the Wilshire store was that "film stars" often are seen "trundling carts" there.
"Well, that started three years ago, when it was reported in the National Enquirer that Richard Gere had purchased several cases of Perrier in our Fairfax (Avenue) store," Schiffer said.
"Also, O.J. Simpson's sister went into the Wilshire store, and bought all the copies of his book 'I Want to Tell You' that we had on sale."
No other star sightings are confirmed, said Schiffer.
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