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A regional discount retailer, Universal International, Inc., operates a chain of nearly 60 Only Deals stores in the upper Midwest and Texas. For much of its history, Universal was known primarily as a wholesaler of close-out merchandise, operating on a national basis for more than two decades. In 1997, however, the company exited the wholesale business and pinned its future on its growing chain of Only Deals retail outlets, which sold a variety of merchandise, including toys, food, health and beauty aids, housewares, and other items, all priced between $1 and $10. The Only Deals concept was first tested in Minnesota in 1991, followed by a rush of store openings that fanned out from the company's headquarter state of Minnesota. During the late 1990s, Universal also controlled a 40.5 percent stake in Odd's-N-End's, Inc., a New York-based discount retailer that operated more than 20 discount stores in its home state.
Universal was founded by Norman J. Ravich in 1956 as a small, privately owned chain of retail stores selling discount merchandise. He christened his outlets "Little Big Dollar Stores," and began stocking the shelves with an eclectic array of merchandise including health and beauty aids, household gadgets, and sundry other products all priced under $1. For roughly 15 years, Ravich poured his energies into developing the chain. He opened new stores when profits gleaned from his existing stores gave him the financial means, and he added additional units through franchise agreements, creating a substantial regional retail chain in less than twenty years. By the early 1970s, however, Ravich had resolved to close his retail chain, which at its peak comprised 50 company-owned Little Big Dollar Stores and 25 franchised units, and in its place establish a business focused on the wholesale side of discount merchandise. The turning point arrived in 1972.
Ravich left behind a successful, firmly established business for the vagaries of starting anew. He quickly registered success in wholesale, transforming Universal into a specialist in close-out merchandise. When close-out merchandise became available through over-production, the discontinuation of a particular product line, or excess inventory, Universal purchased it in large quantities at prices that ranged from 10 to 50 percent of traditional wholesale prices. The company then found retailers to purchase it, and the retailers, in turn, sold the merchandise to the public. The key to success was locating the close-out merchandise in the first place--that is, finding the best bargains--and then developing an ample roster of retailers willing to buy it. In this essential process, Ravich acted as the chief bargain-hunter and buyer for his company. It was a position he held for the next two decades, as Universal matured into one of the nation's leading wholesalers of discount merchandise.
By the mid-1980s, the company had a steady and enviable record of consistent financial growth behind it, but success never bred complacency--or even much satisfaction--at company headquarters in Minnesota. Under Ravich's direction, the company undertook another gradual reorganization, moving back to its retail origins.
The basis for the change was a desire to increase Universal's stature, particularly its financial might. After nearly 30 years of business, Universal's revenue volume stood at a modest $5 million, and the company's management, led by Ravich, was determined to increase that total by developing a retail arm to augment the company's wholesale business. With this as his aim, in 1985 Ravich slowly began laying the groundwork for Universal's re-entry into the retail sector, recruiting new management talent and putting in place an operational structure to support retail activities. By the beginning of the 1990s the pace of change had accelerated, touching off a period of expansion that eventually led to Universal's complete transformation.
In late 1990 Universal completed its initial public offering of stock. Its debut as a publicly traded company marked the end of 34 years of private ownership and netted the company $4.5 million, capital it would need to fund the establishment of retail outlets. Norman Ravich's son, Mark H. Ravich, took over as chief executive officer in September 1990, working alongside his father, who presided as chairman of the board.
Mark Ravich perceived the imminent move into the retail sector as "synergistic." By developing a retail arm to its wholesale operations, Universal could take advantage of its expertise in purchasing close-out merchandise--a talent honed over the previous four decades--and broaden its business in a complementary direction.
He created a prototype that operated under the banner "Only Deals," a store that drew upon Universal's experience in the health, beauty, and household merchandise once stocked by the chain of Little Big Dollar Stores, as well as men's, women's, and children's wear. Only Deals offering items that ranged between $1 and $10. The first store opened in the Crystal Shopping Center in Crystal, Minnesota, and was followed by five more Only Deals in Minnesota shopping malls. By the end of 1992, there were 30 Only Deals scattered throughout Minnesota, South Dakota, Iowa, Illinois, and Nebraska, all located in shopping malls or strip shopping centers.
Expansion plans for 1993 called for the opening of 30 to 50 more Only Deals units, a goal the company fell short of. In 1994 Universal entered into a supply agreement with one of its wholesale customers, Odd's-N-End's, Inc., and subsequently acquired 40.5 percent of the company. Odd's-N-End's operated 22 discount retail stores in New York state, which joined Universal's fold in early 1995 when Ravich's company assumed day-to-day control over the retail operator.
Since reentering the retail field, Universal's revenue volume had swelled dramatically, rising to nearly $90 million in 1995, and in early 1997 the company completely divested itself of its wholesale operations. Universal's Only Deals chain had developed into a 56-unit enterprise stretching across six states in the Midwest and in Texas. With Only Deals as its mainstay business, Universal prepared for its future, which had much in common with Ravich's first years as the operator of Little Big Dollar Stores.
Principal Subsidiaries: Only Deals Inc.; Odd's-N-End's, Inc. (40.5%).
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