Closeout Mart thrives on Manhattan's 5th Ave

Discount Store News, May 19, 1997

NEW YORK -- Come on down. In the spirit of consolidation, a critical mass of closeout specialists have pooled their talents and pulled together their wares in close to 200,000 sq. ft. in a single building on the edge of midtown Manhattan.

230 Fifth Ave., known as the Lighting Building until the mid-'80s, is now becoming a destination for out-of-town buyers in its new incarnation as the Closeout Mart.

At least eight floors in the stylish 20-story building are devoted to the showrooms of brokers and distributors of closeout goods: some five dozen companies in all. There are also a number of importing firms that specialize in low-cost merchandise. In addition, higher-end vendors of everything from giftware to linens add an upscale ambiance.

Elise Fishman, executive director of 230 Fifth Ave., and Harvey Richer, director of leasing, said they had no grand plan to become the closeout center of New York. Several of their tenants, such as the Mazel Company and Liss Bros., have always been important in the industry. Their success at 230 Fifth Ave. began to attract more of their closeout colleagues.

As lighting suppliers migrated to High Point, N.C., in the wake of the furniture industry's relocation there, more and more vacancies at 230 Fifth Ave. were taken up by closeout companies. By the beginning of 1996, the closeouters were coordinating events timed to tap the arrival of buyers for major merchandise shows.

Now, 230 Fifth Ave. is a confirmed destination for major retail buyers seeking to tap the opportunistic availability of the closeouters' toys, books, giftware, trim-a-tree goods, housewares, small electronics, fragrances and textiles. The key selling periods fall during Toy Fair, an annual February event, the Tabletop Market, each April; and during major gift and stationery shows.

"Most come pre-show, during the week before," said Harry Mayer, who manages the New York showroom of Mazel Co.

The address is convenient for buyers, Fishman noted. Located mere footsteps away from the Toy Center and the Textile Building, 230 Fifth Ave. attracts buyers from discount and off-price chains, dollar stores, mail-order catalog houses and even some department stores. Mayer said exporters, ready to ship goods to South America and Europe, also visit the Mart.

One tenant, Bargain Wholesale, is a unit of Los Angeles-based 99 Cents Only Stores. The $40 million wholesale division sells goods to other deep discount stores and had until recently focused primarily on trade shows to promote its wares. Dave Gold, 99 Cents Only's president and founder, said Bargain Wholesale moved into the building in January to avoid the high cost of doing business at trade shows.

"Last year, we paid $17,000 to have our samples shipped from California to New York," Gold told DSN. "Then we paid $13,000 to have our samples, nine pallets, moved from the front of the Javits [convention center] to the middle and back again."

Bargain Wholesale can lease its 3,500-sq.-ft. space on the third floor of 230 Fifth Ave. for far less than the cost of going to trade shows four times per year, Gold said. The company now has one full-time employee in New York. He asserted that the benefits of operating in close proximity to similar companies are clearly evident. "We hope to do business from the customers of other people who are in the building, and we hope they do some business from our customers." Mayer, who heads the building's tenant organization, agreed that the showrooms like to refer buyers to one another.

230 Fifth has banded together with the management of 225 Fifth Ave., 41 Madison Ave. and the George Little management company, a major trade show operator, to form the New York Market Coalition. Fishman said the group seeks to promote the city "as a viable marketplace."

Richer said a similar phenomenon could occur in a few major cities; he cited Chicago as a possibility. For now, however, he said he knows of no other showroom building for closeout companies.

The key to 230 Fifth's draw, he said, is simple: one-stop shopping. "We're a supermarket of closeout inventory."