Desperate to turn inventory into cash one day in 1981, Morrie Dym stuck a sign in the window of his Reseda clothing store. "Nothing over $5," it read.
"The first week, I did more business than I'd done in two months," Dym recalls. "Then I brought in more merchandise, and I couldn't do anything wrong. I could sell anything ."
But he wasn't selling just anything. He was selling manufacturers' close-out merchandise for women "that normally would retail for anywhere from $10 to 30 bucks," he says.
Chain of 32 Stores
The concept, loosely referred to as one-price retailing, proved so lucrative that Dym and partner Larry Smith now have a chain of 32 $5 Clothing Stores (stretching from Sacramento to San Diego), employ 300 people and expect sales this year to top $22 million.
Industry experts credit Shoe World of Elkridge, Md., for taking the one-price concept into the big time. About 10 years ago, the company started selling every pair of shoes in their Gussini outlets for $8.88 (later increased to $13.88). But the newest trend--stores full of women's sportswear, much of which sells for a single, low price--is a recent West Coast phenomenon.
"Californians started it," states Fred Wintzer, vice president of Alex Brown & Sons, Baltimore-based investment bankers. "And there are more one-price clothing stores in California than anywhere else. "
Not surprisingly, there's a dispute about who's on first. Dym claims other one-price retailers have followed his lead.
Marvin Shenker, president of Los Angeles-based Allison's Place, a women's clothing chain with more than 250 stores (from Guam to the Virgin Islands) that feature $7-or-less merchandise, says he and three partners "pioneered" the movement. (Recently, Allison's Place went pricier, with a Wow outlet on Beverly Drive that carries $19.99-and-under merchandise.)
Even Thomas Hale, president of the local 99 Only Stores, who currently looks out on an inventory that ranges from toothpaste to Christian Dior silk ties, all selling for the low price of 99, says: "We were the first."
Dym pluckily counters: "I don't mind the competition. In fact I enjoy it."
Among the latest clothing competition is Mama's, a three-store chain situated in affluent areas, such as Beverly Hills. It began a little more than a year ago as a place for m. fredric & co. to off-load sale merchandise.
Another upstart is the $10 (Ten) Clothiers, with two stores, one in Los Angeles and one in Pasadena and two major prices: $10 and $20.
What it all means to the consumer could be seen on a recent Friday afternoon in the $5 Clothing Store on Vermont Avenue. As the queue of women grew longer and longer, it was obvious no one was grumbling about a little price increase. ("Nothing over $6," has been the company's motto since May, 1986.) The day's favorite item was a $6 eyelet-trimmed petticoat skirt.
Sita Satuevananda not only had the petticoat, which she was buying for her mother, but two swimsuits, two shirts, three pairs of shorts and five pairs of socks. A habitue of Bullock's, Robinson's and the Broadway, the young governess said she was "just filling in" her summer wardrobe.
Her total came to a little more than $62, which meant, she said: "Now I can go to another store." Of all the items in her bag, she seemed happiest about the socks: "Two dollars a pair is a great price. I've paid $5 for them elsewhere."
Also in line with a petticoat-skirt was Susan Foley, a sculptor, who said her other haunts include stores in Beverly Center. "And when I was writing for TV," she reminisced good naturedly, "I shopped Neiman-Marcus."
Foley, who sometimes accessorizes her bargains with "$120 hand-pounded earrings," said she began visiting the store on a weekly basis after spotting a garment she knew was selling for $130 in a boutique.
She was sad to find the press at her elbow: "I don't want anyone to know this place exists. It will be like the time an article was written on the Hollywood Reservoir. Suddenly 50,000 people were out there."
At Mama's on Sepulveda Boulevard in West Los Angeles, the after-work crowd was rolling in looking for $10-and-under bargains. "This place is addictive," mused Glynis Rojeski, an employee who took a job with the store after finding she was spending a lot of time and money on the "fun bargains."
Pressed for Time
One smartly dressed customer, equipped with a beeper fastened to a Louis Vuitton handbag, claimed she was too pressed for time to talk about her interest in off-price merchandise. She then spent more than an hour, keeping several cheerful salespeople after closing time, to round up $113 worth of merchandise, ranging from shoulder pads to a swimsuit. She paid for it all with a credit card.
Word-of-mouth advertising, individual dressing rooms, nice carpeting, customer service and "value" are all part of the personal-touch philosophy behind many California-based one-price/off-price stores.
Often, store names are just one more example of the cozy nature of the business.
Allison's Place, for example, which according to Shenker is patronized "by the working girl and by people who pull up in Mercedeses and Rollses," was named for partner Ben Goldstein's daughter. And Mama's came about because owner/buyer Fred Levine felt it was time his mother and business partner Phyllis Levine "got some billing."
Analyst Fred Wintzer estimates there are presently 500 to 600 one-price clothing outlets in the country.
"The shoe thing is old," he says. "The excitement is in apparel." But it's only women's apparel, Wintzer says, "because I don't think you could hone a single price for menswear." Added to that are the statistics and the capricious nature of feminine fashions.
"Women's apparel is a $93-billion product category. It's twice as big as men's, and there are far more close-outs," he explains. "Something like 20% of all apparel, either produced here or imported to this country, ends up in the close-out market.
"Menswear manufacturers," he adds, "don't make as many mistakes as women's. That's because we don't go from short skirts to long and back again. We wear the same thing every year."
As yet, the one-price concept hasn't harmed conventional retailers, according to David Jackson, an analyst with H.J. Meyers & Co. in Beverly Hills: "It would have to get much bigger to do that."
But frequent price reductions, he says, especially on a marathon one-day basis, have led consumers "to demand and expect sale merchandise. This way, they can get it every day."