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Apparently, He Really Is the King

Retail: Paul's TV store sells more big screens than some chains. Catchy ads, good customer service are key.

April 09, 2001|LESLIE EARNEST | TIMES STAFF WRITER

Big-screen television dealer Paul's TV has one store, sells two brands, shuns such modern tools as the Internet and is four miles from the nearest freeway offramp.

But the La Habra retailer has survived for decades in an increasingly cutthroat industry as smaller competitors folded and heavyweights such as Best Buy and Circuit City opened around it.

Paul Goldenberg, who for years has crowed "I am the King!" on radio and television ads, says his company is thriving and insists he can weather an economic slowdown because the big-screen TV market is "exploding."

Customers say they are lured by Goldenberg's hokey ads, his prices and pledge to deliver anywhere in Southern California, usually within four hours.

"Who else is the king?" asked Jeff Marx, a 57-year-old product marketing director who recently drove 90 minutes from Woodland Hills to Paul's TV. "It's a joke, but it worked for me."

Goldenberg, 72, focuses on the big-screen niche, which industry insiders say has grown steadily over the last couple of decades and holds increasing promise as consumers warm to digital TV, with its sharp pictures and wide screens.

The self-proclaimed "king of big screens" said he sells about 10,000 TVs annually, at an average price of $3,000--a tab that can climb to $6,000 when cabinetry and a sound system are included.

That volume makes Paul's the largest single-store dealer for Mitsubishi Digital Electronics America Inc.--the nation's top seller of large-screen digital TVs. Paul's has held that distinction for 17 years in a row.

"He does more out of that one store than many chain stores do," said Max Wasinger, vice president of sales and marketing for Mitsubishi Digital in Irvine.

Merging With the Marketing

The business is driven to a great extent by the high-profile personality of its owner, whose long-running advertising spots have made him a familiar figure in Southern California. His persona pulls in customers, and they find at the store that the man has merged with his marketing: A picture of Goldenberg wearing a crown hangs in his showroom.

Though Goldenberg sells big-screen sets, he is really in the customer-service business, said Tom Edwards, an analyst with NPD Intelect Market Tracking, a New York firm that tracks consumer-electronics sales.

It helps that he has a veteran crew: 11 of the 12 salesmen have been with the company for more than seven years. All were trained by the boss.

The company's attention to service, said Edwards, has won it "tremendous loyalty" from customers.

Deliveries, for instance, are free, even if they take hours. In one instance, Paul's drivers hauled a television to El Centro in the Imperial Valley, a 220-mile trek that required crossing snow-covered mountains, Goldenberg said.

"It wasn't perhaps our most profitable delivery," he said.

By comparison, Circuit City Stores Inc. said it offers free delivery on big-screen televisions within the Los Angeles area, usually the following day. Best Buy Co. generally delivers within two days at a cost of $29.95 in the store's vicinity. Deliveries that are farther away cost about $1 a mile, according to a Best Buy spokesman. Good Guys Inc. generally delivers the next day, but at a cost of about $50.

The big chain stores may be more convenient or offer a wider selection, analysts say, but mom-and-pop operators like Goldenberg can zero in on a niche, offer greater customer service and carve out a good chunk of the market.

"If the competition knew how well he does, they'd have a heart attack," said Dennis Holt, who handles Goldenberg's media buying and has known him about 30 years.

Competitors are closemouthed about Paul's TV. An executive at Ken Crane's Home Entertainment City in Hawthorne, for instance, would say only that Goldenberg is a "formidable competitor."

"He says he's the king. Yeah, whatever," said Robert Waldron, a young customer service manager at the Circuit City store nearest Paul's.

It's not clear yet whether Paul's profit will be hammered by a cooling economy. The national economic slowdown already is hurting some bigger retailers.

"[Consumer electronics] is an industry that does not do very well during periods of economic slowdown," said Todd Kuhrt, an analyst with Midwest Research.

And profit margins at independent retailers are generally thin--about 2%, analysts say--so a drop in sales volume can cause a serious dent in the bottom line. At the 2% rate, the sale of 10,000 televisions at $3,000 each would yield $600,000 profit.

But Goldenberg, who declined to reveal profit or specific sales numbers, is upbeat: "We had the best February we've had in many, many years, and we had a fantastic January."

Sales rose about 17% last year from 1999, he said, and jumped 30% in February from the same month last year.

Coming to See the King

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