Ever wonder who came up with the idea of 99 cent stores. . . This article was written in 2002. Still super relevant and glorious. Im sure alot has changed for better of for worse since this article was first completed. But nonetheless there are some gems in here.
[Kitschy promotions, memorable bargains and low overhead (it's based in a no-frills warehouse in run-down City of Commerce, Calif.) have made 99 Cents Only one of the most successful retailers around and put Gold, 70, on The Forbes 400 (2002) this year, with a $650 million fortune. He joins 18 other retailers on our list. It is perhaps surprising to discover that the combined retail fortunes on these pages come to $113 billion, just shy of the total for technology. And while Bill Gates is easily the world's wealthiest person, $43 billion by our reckoning, if Sam Walton were alive today and had not dispersed shares to descendants, his stake in Wal-Mart shares would be worth $99 billion.
Over the past five years, combined sales at 99 Cents and three similar chains have grown 20% annually, far more than in any other retailing segment, says Merrill Lynch analyst Daniel Barry. For the moment, no one runs a dollar store better than Gold. His cast-off merchandise is so attractively displayed that a photo of one store interior by the famed Andreas Gursky has hung in Manhattan's Museum of Modern Art. Even officials in Lancaster, Calif., who tried last year to invoke an urban-blight law to force 99 Cents out (to make way for a Costco expansion) admitted to the court that they "loved" the store. Gold won the suit.
Gold's 142 stores, all in California, Nevada and Arizona, pull in on average $4.7 million a year from 15,000 square feet of space. Gold's gross margin is 40%, meaning that a 99-cent item costs him only 60 cents. That's double the gross margin at Wal-Mart, and Gold's net margin of 8% is better than double Wal-Mart's, too.
Every 99 Cents location opens 15 minutes earlier and closes 15 minutes later than the posted hours. No small shopkeeper would ruin a sale simply because closing time has come, Gold explains. And he has never allowed any kind of negative signs like "No shoes, no service" or "We don't make change," only positive signs saying "Come as you are" or "We gladly make change."
The son of Russian immigrants, Gold started helping out at their Cleveland fruit stand as soon as he started grade school. Retailing was in his blood; academics wasn't (he dropped out of L.A. Community College). In the early 1960s Gold and his wife, Sherry, owned a liquor store in central L.A. In an attempt to goose sales of slower-moving wines, they stocked a shelf with a banner offering: "Wines of the World. Your Choice: 99 Cents." Gold dreamed, and talked, about running a whole store full of such bargains, but he was 50 by the time he reached his decisive moment. As Gold and his wife were driving back from the airport, a since-deceased friend, James Wayner, lost patience with Gold when he yet again mentioned the 99-cent idea. "Damn it!," Wayner shouted, "I'm sick and tired of hearing you talk about the 99-cent store! Look, there's a store for rent right now. Why don't you grab that one?" He made Gold pull over and inquire about the space. Gold struck a deal that day.
"Rich people love bargains. That's how they got rich," he says. That's how he got rich, too. ]-Forbes
