The CEO of 99 Cents Only says many of the chain’s shoppers live in Beverly… (Genaro Molina, Los Angeles…)
Discount chain 99 Cents Only Stores Inc. is shopping on Rodeo Drive.
The City of Commerce retailer, which has thrived in the economic downturn, announced that it was scouting real estate on the iconic street in Beverly Hills to open its flagship store, said Eric Schiffer, the company's chief executive.
"We know many customers are driving from Beverly Hills to shop at 99, and they have been saying 'Please open a location in Beverly Hills,'" he said.
Schiffer said the posh customers expected to shop at a new Rodeo Drive store are now driving to the 99 Cents store on Wilshire Boulevard near Beverly Hills. It is the best-performing store in the entire chain, pulling in sales of nearly $12 million last year, compared with the average of $5.2 million.
A location that recently opened in Santa Barbara's luxe State Street is also bustling, Schiffer said.
"We buy name brands like Wolfgang Puck, we have Jamba Juice items, Toblerone candy bars," Schiffer said. "Some customers don't recognize the gourmet items, but someone who values and knows the brand gets excited because they are getting a $4 item for less."
The company, which was acquired last year by L.A. private equity firm Ares Management and the Canada Pension Plan Investment Board, operates about 300 stores in California, Texas, Arizona and Nevada.
99 Cents Only stores have flourished in affluent areas where discerning consumers snatch up name-brand products and organic produce that 99 Cents buys cheaply from overstocked suppliers, Schiffer said.
"We have seen a trend with more wealthy customers coming into the store for the first time or coming more frequently," he said.
But persuading a landlord accustomed to tenants like Chanel and Louis Vuitton to make room for 99 Cents Only may be tough.
"The rent will be high, but these guys can afford it," said Ron Friedman, a retail expert at accounting and advisory firm Marcum in Los Angeles. "But how do you get a 99 Cents store on Rodeo Drive when you have these great, high-end luxury brands there? What landlord would want to do that?"
Schiffer concedes finding a spot will be "challenging." But he predicts that economic reality will trump any snob factor.
"Maybe there is a landlord on the street who is thinking of the future and thinking it might be good for other tenants," he said. "The exception proves the rule — you have one discounter on the street and it helps everyone else out.
"We want to be that one exception."