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The Second Time Around

October 03, 1988|NANCY RIVERA BROOKS | 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.

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