They Can Get It for You Wholesale (Almost)

He strides across the home screen--a burly leprechaun in work shirt and blue hard hat. In an accent straight from the streets of New York he answers an off-camera voice that keeps asking: "So what's da story, Jerry?" The story is a hammering promotion for JGE (Jamaica Gas & Electric), a cut-rate appliance firm that sells only to union members, civil service employees and their families. As Jerry explains: "Know the model and number of the appliance you want; Jerry can get it for you wholesale." The voice concludes: "So that's da story, Jerry?" Roars back the pitchman: "That's the stawry!"

The commercial, which has been blasting from four New York City-area television stations 144 times a week, has made Jerry Rosenberg, 39, a local celebrity, renowned as the workingman's friend. It has transformed JGE, which Jerry owns with his brother Charlie, 44, from a run-of-the-crate appliance store into a wildly successful discount business that is expanding its unbuttoned merchandising methods far and wide. JGE's sales have gone from $1.8 million in 1971, its first year of discounting, to an expected $8 million this year. Operating on gross profit margins of about 12%, less than half as much as other appliance dealers, the Rosenbergs will post net earnings of about $250,000 from their single outlet.

The Rosenberg brothers are embarked on a new venture that could well balloon their business without risking a dime of their own money. They are licensing the JGE name to furniture and carpet retailers who want to go discount. The licensees pay an undisclosed percentage of their gross to JGE for its advertising and merchandising help; beyond that, they are on their own. So far, JGE has recruited eleven merchants in New York and New Jersey and is negotiating with 28 others whom the brothers expect to sign up this month. The Rosenbergs confidently figure to expand soon from coast to coast.

Big-time though it is, JGE sticks stubbornly to small-time style. Its "showroom" is a small, carton-crammed section of a warehouse in a sidestreet in Bayside, Queens. All sales are for cash. Except for the Rosenbergs, who sometimes help unload trucks, only part-time employees mind the store. They include moonlighting policemen, housewives and four or five high school basketball players from the Friends' Academy in Locust Valley, N.Y. Clerks make no effort to push a particular brand or persuade customers to buy a higher-priced item; they simply take orders. Yet JGE turns over $300,000 worth of stock about every two weeks.

Save a Bundle. The Rosenbergs saw the potential of reviving real discounting seven years ago, closed their regular appliance shop and set their sights on a specific target: union members and civil servants who are willing to travel 50 miles or more to save a bundle. Now buyers queue up to get in--and save. A 5,500-B.T.U. General Electric air conditioner goes for $149 at JGE v. $184.95 at Macy's; a compact portable dishwasher sells at JGE for $159 v. $199.95 at Macy's; a Sony portable color TV sells for $375 v. $470 at Bloomingdale's for the identical model.

At first the Rosenbergs thought that by limiting their customers to union members, they could sell low and avoid hassles with manufacturers. But JGE's advertising has riled competitors and brought it into conflict with anachronistic Fair Trade laws, which keep prices up by authorizing manufacturers to set minimum retail costs for their products. General Electric, Sony and other major appliance makers will not deal with JGE because it sells well below the fixed price. Thus the brothers are forced to buy where they can--through cooperatives or from friendly wholesalers and distributors. "We get up a little earlier, and we find the stuff," says Charlie.

When Panasonic sued JGE for fracturing the Fair Trade laws, Jerry refused to pay a fine, salivating at the thought of how much JGE's good will and sales would be buoyed if he were dragged off to jail for cutting prices. Panasonic saw the same sort of result and let the matter drop. In a recent counterattack, Jerry hired a clutch of scantily clad models--at $25 an hour--to parade before New York's city hall chanting: "Make GE stop hurting our Jerry!"

The Rosenbergs were born on Manhattan's Lower East Side. For all their sudden wealth, they still live modestly, sharing a two-family house ten blocks from their store. Charlie, who attended City College and had ambitions to be a musician, is a gaunt, sad-faced version of his ebullient brother and is one of the shrewdest buyers in town. Jerry, who dropped out of high school at 15 after setting a school record by playing hooky 61 straight days, is the crudely charming front man. Unable to fully believe in their new-found fame and fortune, the brothers continue to worry that somehow it will all be taken away, perhaps by the Fair Trade dragon. Says sad Charlie: "We get up in the morning as if we were sitting on a bubble." Still, the brothers are not daunted. Their newest plan is a move into auto sales at big discounts. Hear that, Detroit?

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