99 Cents Only Stores

99¢ Only Stores is dedicated to providing exceptional value. The Company's strategy is to consistently offer a wide selection of name brand value priced, consumable merchandise. The Company strives to provide its customers with a wide variety of first quality merchandise that exceeds the customers' expectations of the selections available and the quality of name-brand consumable products available that can be purchased for only 99¢. The Company believes that its name-brand focus on food and other everyday household items increases the frequency of consumer visits. Operator of a fast-growing chain of stores, 99¢ Only Stores buys merchandise from suppliers getting rid of excess, discontinued, or expiration-dated inventory and sells the products in a chain of retail outlets, pricing every item at $.99. Most of 99¢ Only's merchandise consists of name brand products and nearly half is consumable goods. The company's stores--numbering more than 60 units during the late 1990s--were large, brightly-lit, and filled with shelves displaying household, staple merchandise, attracting largely middle-class customers who patronize the stores on a weekly basis. All of the company's stores during the late 1990s were located within 50 miles of downtown Los Angeles, but as the decade drew to a close there were signs of much broader geographic expansion. In November 1997, the company acquired 48 percent of Universal International, Inc., owner of a Minnesota-based deep discount chain with 49 stores in the upper midwestern United States and in Texas and part owner of a closeout retail chain with 22 stores in upstate New York. In February 1998, 99¢ Only announced a proposal to acquire the balance of Universal International, which was expected to be concluded by mid-1998. In addition to its chain of retail outlets, 99¢ Only also operated a wholesale business named Bargain Wholesale, which distributed discounted merchandise to retailers, other distributors, and exporters. The founder of 99¢ Only, David Gold, most likely drew his inspiration for the deep-discount chain he created from an epiphany decades before he opened his first store. While Gold was working at a liquor store he co-owned with his brother-in-law, he reportedly noticed that bottles of wine priced at $.99 sold better than bottles priced just a few pennies more. The allure, he knew, was more psychological than financial, a ploy on the minds' of consumers that was universally effective. He vowed to open his own store one day that offered a full gamut of merchandise all priced under one dollar, but for years his entrepreneurial plan remained on the drawing board. Before putting his plan into action, Gold, the son of Russian immigrants, established himself in a business that required many of the same talents he would need to make his dream a reality. Gold began as a wholesaler, starting his own operation in 1976 that purchased and sold name brand, closeout merchandise. It was Gold's responsibility to locate the best bargains and then find retailers willing to purchase the merchandise, a task that he executed with skill. One of Gold's competitors would later note as much, remarking that Gold was "the best merchant I've ever seen." Other observers directed more praise Gold's way, with one of his retail customers describing a particular talent that was indispensable in the discount business arena. "He has a retentive, calculator mind," the candy retailer explained, referring to Gold. "He will remember the price of something you showed him a year or two earlier, even if he didn't buy it." His native inclinations served him well in the wholesale business, but always in the back of Gold's mind was the desire to open his own "dollar store." It took until Gold was in his 50s to finally put his liquor-store observations to the test, but when he did take that first fateful step, his seasoned experience as a bargain hunter bred instant success. "I talked about opening a store that would sell only na