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Gold's Mine

The son of a Russian peddler established a discount retail chain based on an idea so simple that it seemed impossible: selling everything for only 99 cents. That concept has proved not only possible, but also very profitable.


"He's a master merchandiser," said Seth Feinstein, an analyst with Crowell, Weedon & Co., a Los Angeles investment banking firm that last year helped sell the public a stake in 99 Cents Only for $14.50 a share.

As Gold's chain began to take off during the 1980s and early '90s, well-dressed Los Angeles bankers began dropping by Southern California store openings to chat with Gold and offer advice on how to take the company public.

"It's hard to know who to choose--or whom to trust," said Gold, who, with help from his son-in-law, a former venture capitalist, eventually picked a team of bankers.

The company decided to go public on the New York Stock Exchange in part to differentiate itself from other discount stores flooding the market. Being able to tell suppliers it was an NYSE company helped provide credibility, Gold said.

The company's stock price has increased steadily. It gained 75 cents Friday to close at $24 a share, a 52-week high.


These days Gold is a long way from his Grand Central Market liquor stand draped with flags from all over the world and shelves stacked so high that he used a ladder. It looked like a library of liquor, Borenstein remembers. Gold bought his discount wares in bulk, sometimes at pennies on the dollar, in close-out sales, bankruptcies and even from liquor stores damaged in the Watts riot.

Gold still thinks of each store as a little like that stand, and seemed momentarily puzzled when reminded that he runs a chain now.

"I guess you can say we are a chain, and we are a chain, but we don't think of ourselves that way. We are just a bunch of small businesses," he said.

And what about 99 cents? How long can he keep selling at the same price? Isn't he worried about inflation?

"When we started off there was 18% or 20% inflation, crazy inflation, and I thought we'd last a year or two at 99 cents," Gold said. "But right now, I think we can stay at these prices for the foreseeable future."

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