THE SECOND TIME AROUND

Times Staff Writer

Recycler Classifieds has grown beyond its founders' expectations by giving away mostadvertising and asking readers to pay for the newspaper. Though the paper wants to maintain itsimage as a struggling alternative publication, success is hard to ignore when devoted buyersline up each week.

They gather early every Thursday morning at an unassuming brick building in the Silver Lake business district, forming a line that by 7 a.m. often stretches across the parking lot to the street.

These dedicated bargain hunters are waiting for the Recycler Classifieds, an unusual newspaper that has become a phenomenon in Southern California. The scene at the Recycler's headquarters is duplicated at several of the six other Southland offices of the thick, tabloid-size newspaper that has none of the flashy graphics and snappy copy that supposedly characterize successful newspapers today.

The Recycler Classifieds is just that: a newspaper filled with classified advertising. But these are not exactly normal classified ads.

The Recycler doesn't subscribe to the usual economics of advertising for that class of publications known as "shoppers" or "pennysavers," which charge for ads and then distribute their papers free to households in a certain area. Instead, the Recycler runs the bulk of its classified ads for free and charges buyers of the newspaper.

Different Market

That concept appears to be working. The Recycler, which bills itself as the world's largest free-ad paper, is celebrating its 15th year of publication by looking for new growth opportunities.

"We have quite a following," said Recycler General Manager Barbara Ackerman, who, in keeping with the informal atmosphere at the newspaper, is known as "B. J." On Thursday mornings, "they're waiting anxiously with their dollars in hand."

The whole field of alternative advertising publications grew quickly in the late 1970s and early 1980s, stealing some potential small advertisers from mainstream newspapers, media watchers contend. But for the most part, they say, shoppers and free-ad papers tend to serve a different market that wouldn't pay the higher rates charged by bigger newspapers.

The Recycler made a humble debut in July, 1973, under the name E-Z Buy E-Z Sell, a 16-page mimeographed effort with 2,500 ads. The paper was supposed to cost 25 cents, but most of the 15,000 copies were given away free.

The paper was the dream of Gunter and Nancy Schaldach, who came from Canada with their three children to launch their business, which was modeled after a similar publication in Vancouver.

The paper was not an immediate success, and Gunter was forced to work during the day as an electrician and put together the paper at night, recalled John Dorman, who joined the operation in 1974 and now owns and runs McDuck Distribution, which distributes the Recycler to more than 6,000 stores.

(The Schaldachs, who still own all of the Recycler, keep a low profile these days and are not deeply involved in the daily operation of the newspaper. They were unavailable for interviews.)

"The phone would ring at 12 midnight, and we would grab it and take an ad," Dorman said. "We were doing the layout and paste-up at Gunter's house. Everybody worked very hard. These were 80-hour, 90-hour weeks.

"At the beginning it was kind of a chicken-egg thing," he said. "People would buy it to get access to advertising, but there weren't very many ads. But we had to sell papers to get ads."

Profit in 1975

The name was soon changed to the Recycler to buy into the popularity of recycling in the early 1970s. It took about two years to get the business on its feet, and at one point the Schaldachs had to borrow money using Gunter's car as collateral after running through all the cash they could borrow from friends and relatives.

But in 1975, the paper finally turned a profit and graduated to weekly publishing from its previous biweekly schedule. The sale of display ads became an important source of revenue, and the company was able to hire its first full-time salesperson.

In the '70s and '80s, the Recycler propagated into seven editions covering Los Angeles, the San Fernando Valley, the South Bay, the San Gabriel Valley, Orange County, San Diego and the Inland Empire. The company has swelled to more than 200 employees, not counting the 120 who work for McDuck Distribution. A sister publication, Photo Buys Weekly, which features ads accompanied by a photograph, was started in 1982.

Although the company doesn't release financial information, the Recycler's profits continue to grow, Ackerman said. With a weekly readership of more than 540,000, the Recycler claims to be the weekly paper with the largest paid circulation in Los Angeles. With single copies of the paper retailing for 55 cents to $1.25, depending on the edition, the company appears to bring in at least $500,000 a week in circulation revenue, or $26 million a year, not including display ad sales.

Ackerman said the challenge as the Recycler grows is to maintain the atmosphere of the struggling alternative publication that it was in the early 1970s.

Scattered among the ads are helpful selling hints and an admonition to "be fair and buy the paper" if you are a free advertiser, because production costs are covered by the sale of the paper. The Recycler's staff box lists employees, from the publisher on down, with first names only.

Employees are provided with fresh-squeezed orange juice every morning and can take group or individual exercise classes during the day. The staff fitness coordinator is also a licensed masseuse, so "if people get real up-tight, they can call her in and do a massage," Ackerman said.

'Healthy and Happy'

Circles of seated operators take advertising calls, working toward their weekly Tuesday deadline, after which the paper is typeset, pasted up and sent to the printer. Professional acupressurists come to the office on Tuesdays, when employees are frantically working to meet their deadlines, to relieve tension in hands, arms and shoulders.

"We want to keep everybody healthy and happy," Ackerman said. "They're the ones who have contact with our customers."

The Recycler is continuing to look for ways to grow, she said. "At the present, we have no plans to go a long distance away and start one" but instead will focus on such nearby areas as Newhall and Palmdale.

"We're really trying to establish--I don't want to say 'corporation' because I hate the word--a real strong structure," she said. "Then we can grow miles away." Ackerman said the Recycler is successful because "the ads work."

"People know that the best bargains in town are found in the Recycler," she said. Advertisers know that "the people who buy the paper are serious buyers."

In fact, some readers are so serious that the Recycler must jealously guard the name and location of its printer to keep die-hard bargain hunters from staking out the printing plant in hopes of getting an early copy.

Ackerman said the price of the Recycler's ads--nothing for private parties, although it does charge for business and display ads--can't be matched by daily newspapers. Many pennysavers don't categorize their ads as thoroughly as the Recycler does, and some are nothing but a jumble of unclassified ads, she said.

Steady Growth

There are very few free ad papers in the United States, Ackerman said, adding that the concept appears to have caught on better in foreign countries. The Recycler is a member of the Free Ad Papers International Assn., which has 49 members in 19 countries. The association's members trade ads, giving the papers a more international flavor. Many of the ads are printed in foreign languages and frequently seek pen pals or foreign friends.

The fact that the private-party advertising is free is still hard for many people to accept, Ackerman said.

"People really have a difficult time with it," she said. "People nowadays have the idea that nothing is for free--what's the catch?"

Growth of the paper has been steady and the latest zoned edition, the 18-month-old Inland Empire edition, now stands on its own, she said.

The Recycler recently discontinued its San Francisco edition because the distance complicated operations. "We thought we could invest the money locally and be more effective," Ackerman said.

The Recycler consistently prints more than 100,000 ads a week and only 5% of the classified ads are paid business ads, Ackerman said.

Automotive is the biggest category, requiring a separate section in the Los Angeles and San Fernando Valley editions. But the Recycler is constantly adding categories, such as the recently launched computer bulletin board section and the 2-year-old "Person to Person" section of matchmaking ads that has resulted in several marriages.

Some offbeat items have made their way into the Recycler's pages over the years, including a bat used by Babe Ruth, sections of bed sheets that the Beatles supposedly slept on and Robby the Robot from the old "Lost in Space" television series.

The Recycler refuses to accept some advertisements, such as private-party ads for handguns or religious and political announcements. The computer system and the staff comb each week's publications for phony ads and search out phone numbers that previously had placed ads misrepresenting merchandise or that appear too often, suggesting that the advertiser is a business, not a private party.

"We're very conscious of people that may try to abuse the paper," Ackerman said.

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