Being a true cheapskate, I've long worshiped the iconic 99¢ Only Store and its legendary and late-blooming founder, David Gold. Gold ranked in the Forbes 400 back in 2004, but didn't launch his empire until he was well into his 50s. And just last month, his extended family and private equity firm Leonard Green offered to take the retail chain from public to private—for $1.34 billion. Curious about Gold's unorthodox road to riches, I interviewed him and his wife Sherry at Los Angeles's public radio station KCRW, where the podcast will be made available next week. Below, Gold's 10 steps for turning pennies into millions.
I was born in Cleveland in 1932. My family then moved to Southern California when I was very young. My parents had come to the States from Russia. My mother had gone to school through 8th grade, and my father had only finished through 5th grade. They were just trying to survive.
I did very badly in school—in fact, I was near the bottom. I only beat out maybe 10 or 15 kids at Los Angeles High school. I didn't do much homework. But I was always working—whether stocking shelves or delivering newspapers, I always had a job. I mean, I got mostly C's and D's. I was happy if I got a C. My parents didn't get upset at my grades. They just accepted me for who I was.
My wife and I had the idea for the 99¢ Only Store for more than two decades before we did anything about it. Through age 50, I had spent my career running three stores in my family's liquor business in downtown Los Angeles. For 20 years, I observed a phenomenon, but never acted on it. I had noticed that bottles of wine that went for 89¢ or 99¢ moved much faster than bottles that were $1.59 or $1.49. I noticed that early on, when I was in my 20's, but I just sat on the idea for decades. Usually, when you have an idea like that, four other competitors also have the same idea and race to the market. I always thought someone would come up with the idea of selling things for a decent bargain. Nope.
It was 1982, and I was already in my 50's. I was driving around with my wife Sherry, and this really smart hobo guy who sold beverages to us, Jimmy Wayner, was in the car. We were on Hill Street in downtown LA. Jimmy was this really interesting guy. He didn't have any schooling, but he was really bright. In his youth, he got arrested many times. A great hobo. During the depression he used to ride the rails. That day we were driving in the car, I was talking about my 99¢ Only idea, as I had for decades. So Jimmy just shouts out in complete frustration, "Damn it. There is a store right over there. Open up the f....ing store, or shut up. Stop just talking about it." A hobo shamed us into pursuing the idea. So Sherry and I opened our first store about 60 days later. We didn't borrow any money. No business plan, no nothing. Jimmy passed away a while ago. We were able to give him some stock, and he did very well.
Walmart has changed quite a bit… 'Lowest price always'… then 'Always low prices' and now, 'We will match the price'. They changed their image. We have been very careful with our store. We started with 99¢ in 1982, which by the way, when you adjust for inflation, is about $3.00 in buying power today. We have held true to our concept.
Waiters and waitresses are out front getting the tips and getting the attention. But the busboys work really hard and it is hard for them to get a piece of the American Pie—essentially, people who did not graduate from high school. It makes us feel good when we gave the employees options. When we went public, we spread around the stock to every level of employee. They wound up buying homes, and they bought it with cash and that made us feel really really good.
We once had a drink named Aquavie in pineapple and bamboo flavors. Somehow we got stuck with a bunch of the bamboo flavor. It would not move off the shelves. So one day, we tasted it and it tasted like...bamboo...horrible beverage...which is why it did not sell. We had truck loads and truck loads of that stuff. That company went out of business.
Surprisingly, our stores do best in upscale neighborhoods. In Houston, in Arizona, in California. In our Beverly Hills store on Wilshire Avenue, the parking lot has the occasional BMW or Rolls Royce. Tyra Banks talks about our store, Liz Taylor used to. It surprised us to find out we did best in upscale neighborhoods.
My wife and I do not go to Saks or Neiman Marcus. But we do go to Macy's when they have these great sales! I try to never pay full price. But it is hard to avoid paying full retail with gas and electricity. I guess you could say I do so under protest. No private jets. No homes in the Bahamas. No chalets in France. We live in the same house we we bought 47 years ago near Olympic and LaCienega in Los Angeles. Sherry is my first wife, and we have been married 53 years. (Sherry interrupts David to explain they did splurge—they took the family on a cruise, once.)
We try to be generous on charities. A person needs only so much to live and the excess is really not that important. We are fortunate to be able to help those less fortunate than ourselves.
Header photo by loop_oh; photos of David and Sherry taken at KCRW.
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