"I stand at the counter and ring up a $55 jacket for $5, a $30 pair of pants for $5. It takes an enormous bag to put those two things in, yet I ask the customer for $10. Then I look at myself in the mirror," relates round-faced, mustachioed Morrie Dym, "and say, 'This is sick!"
Trying to make a go of it by retailing brand-name, first-quality clothing at a mere $5 per garment in well-lit, carpeted stores attended by company-trained personnel has to be considered off the wall, even in southern California. But Dym, 43, and his partner, Larry Smith, 44, have been doing just that since 1981. Their enterprise -- the $5 Clothing Store (FDCS) -- has expanded, solely through internal financing, into 30 West Coast outlets with 300 employees, and this year the so-far private chain expects to gross close to $20 million.
Which means (let's see, 5 into 20 goes . . .) these superdiscounters must be moving 4 million pieces of apparel a year! So they have to be buying that many, superadvantageously. And therein lies the secret, which anyone can see who isn't in Bergdorf-size markups. "A guy's generally taking a loss when he sells to us," sympathizes Dym, who with Smith comprises the chain's buying team. "It's how you make him feel. We don't insult the merchandise. It's an art."
They don't insult their suppliers' pocketbooks, either. Though FDCS has had little trouble getting 30-day terms from manufacturers, which sell them discontinued and overstocked lines, the company sometimes ups the payment rate to net 5. "Our cash flow is excellent and we don't need terms," Dym explains, "so we wanted to do something nice for people who have been nice to us." In a spirit of harmony rare to the rag trade, the nice people have reciprocated. No longer do the partners have to trek to Manhattan's Sixth Avenue and other exotic boulevards to scout out the junior wear that is their specialty. Now samples are offered to them daily off the glutted shelves of vendors at prices lower than what harder-nosed competitors might be asked to pay.
Still, given margins as scrawny as a fashion model's thorax, there's little time for haute couture airs. Deep discounting cries out for rapid turnover, and FDCS responds. When an importer was hopelessly stuck with an excess of parachute pants after the fad suddenly expired, Dym paid cash for all 250,000 pieces, and had them moved, distributed, and sold within three months. "Maybe they were out of fashion at a high price," says Dym, "but at $5 they were in fashion, even if customers used them to wash their cars." Some merchandise reverts to cash even faster.
Envious merchants have been quick to ape the single-digit concept, and FDCS attorneys have been equally quick to slap a suit -- not the $5 kind -- on any who came too close to their name. Yet if FDCS has a problem, Dym admits, it's that "when you hear the name, you think of schlock: dingy stores with tables and pipe racks." Even so, the name is apt to stick, since Dym's affinity to the fin goes back to how he accidentally got started in '81. Then a clothing jobber, Dym was burned by some invoices and accepted two stores in their stead. Piling the schmattas on sale at $5 apiece, Dym was moved by how fast the stuff went at that magic number. Recently, however, FDCS raised its ceiling a whopping 20% -- to $6. "I had to make some money," protests Dym. "I was tired of doing this for nothing." If profit is the motive, yet higher prices are undoubtedly in the offing. But for bargain hunters, it's reassuring that the $5 Clothing Store took half a decade to get to $6.