Sol A.Shenk

["fivetwofive" <CBL302@xxxx>]

"Sol A. Shenk, 83, Merchandiser Who Built a 700-Store Empire," The 
New York Times, September 1, 1994

Today 9 years to the date Sol A.Shenk passed away.Here is a little 
history of the man and his interactions with the Delorean History.






"Everybody loves a bargain," 

CALL IT FACTORY SURPLUS, close-outs, liquidated merchandise, even 
junk: Nearly every day Sol Shenk accepts 100 truckloads of it at his 
Columbus, Ohio warehouse.

Shenk (sounds like crank), founder and chairman of Consolidated 
Stores Corp., is a knee-slapping, stooped-over 74-year-old kid who 
knows that those trucks are packed with bargains. There are 6 million 
Rubik¹s Cube puzzles, for example. They¹d been dead in the
market two 
years when Shenk found CBS¹ toy company trying to unload them.

"They used to sell for $8," Shenk recalled. "We said if we could sell 
them for 49 cents, it would be a hell of a deal." Shenk took the 
cubes from CBS at about 8 cents apiece. "In about a year we got rid 
of practically all of them," Shenk smiles.

Shenk gets rid of the stuff through Consolidated¹s Big Lots and
Odd 
Lots stores. (No relation to Revco¹s troubled Odd-Lots division in 
the East.) Two years ago he had 45 stores. Now there are 189, with 2 
opening each week, mostly on well-traveled roads around small towns 
in rural Ohio, Indiana and West Virginia. Which means that Sol Shenk 
is presiding over the country¹s biggest and fastest-growing chain
of 
its type.

Dollar General Corp. of Scottsville, Ky., with 1,300 stores in 23 
states, also thrives on cut-rate appeal and low-rent locations. But 
Dollar General handles more soft goods and far less merchandise from 
manufacturers¹ closeouts. Sol Shenk¹s business is 80% hard
goods, a 
ceaselessly shifting mix that embraces items like $18 West Bend crock 
pots; $1.49 Gillette deodorant; $3.99 14-piece Ram Screwdriver sets; 
$1.99 Cannon towels; and 29-cent extra-long telephone cords.

Says one Columbus shopper: "There's almost nothing you can count on 
finding there except some gem that you could probably live without 
but have to have at that price."

Consolidated's sales this year are headed to $390 million, up from 
$74 million two years ago. Profits should top $20 million, compared 
with $4.3 million two years ago. Same-store sales (a key figure, 
since it's easier to increase sales by opening new stores instead of 
tightly managing those you have) are growing at an enviable 13% a 
year. K mart, no slouch in the same store sales growth department, 
has been hitting 8%. 

The competition? Virtually nonexistent in the Midwest, though others 
have tried to make the formula work in other parts of the country. 
It's harder than it looks. Revco's 153-store chain in nine eastern 
states has lost money for two years. Why? Revco doesn¹t have the 
relationships to get enough good closeouts. Irwin Jacob's COMB (Close-
Out Merchandise Buyers) Co. recently took a $4.5 million charge 
against earnings to close half its 41 retail stores scattered around 
the plains states. COMB knows how to buy and has done well peddling 
higher-end closeouts by directmail. But it stocked it stores with too 
many relatively expensive appliances and consumer electronics that 
were too dear for the closeout customer.

Only on the West Coast has a successful rival burgeoned: Los Angeles-
based Pic 'N' Save, with 97 stores and nearly $300 million a year in 
sales, has been printing money for decades ­ producing pretax
margins 
of 30% (outrageous for retail, where 10% is extraordinary), profits 
greater than 30% of equity, and steadily increasing same-store sales.

Most of the time, Shenk gets his goods from manufacturers, frequently 
of well-known brands for whom overruns, product failures and 
packaging changes are part of business. Occasionally, though, he 
can¹t resist a bargain, even if it means venturing outside his 
stores. In 1982 he and two other liquidators bought 2,800 De Lorean 
cars, parceled them out to dealers around the country and sold them 
all in 18 months. He bought them so cheap, in fact, that the court-
appointed receiver for De Lorean Motor Co. is suing to recover some 
of the profits.

Sol Shenk says he has hated to pay full price for anything since he 
was a kid in Columbus. Even today, his office furniture, phone 
systems, store fixtures and store leases are all purchased at 
distress prices. Shenk even picked his executive vice president, Sol 
Norflus, and 100 of his retail managers out of the wreckage of a 
regional discount chain. "I came cheap," says Norflus, stretching the 
truth for the sake of hyperbole. His salary today is $362,000. 
Norflus brought Shenk retail skills. Shenk had never been much good 
at anything besides buying low and wholesaling. After failing as a 
manufacturer of auto parts, Shenk started a company in 1967 to buy 
and wholesale closeout car parts. That was okay until he tried 
opening retail stores to sell the parts. It was a dumb move: How many 
people browse for bargain shock absorbers and mufflers?

It was Shenk's son, Charles, now Consolidated's president, who 
noticed that people were shopping the stores for household closeouts 
rather than for auto parts. Now Sol is on a roll. "We'll be a billion 
dollars [in sales] in three more years," he boasts. That would mean 
500 stores. Which also means that the genuinely hard part is still to 
come: not only opening, but also supplying, all those stores with 
smart buys. Notice that Pic 'N' Save is expanding, too, but adding 
only a dozen or so stores a year.

Consolidated's growth jeopardizes Shenk's relationships with 
manufacturers. They don't want their closeout items sold down the 
block from their first-line merchandise if they can help it. Says 
one: "The wider they get into distribution, the more problems and 
conflicts it could cause us with our good retailers."

But now here's a bargain for you: Sol and Charles Shenk own 6.6 
million shares of company stock. They got it at a very nice price: 66 
cents apiece. The stock, which went public in June 1985, now sells 
around 15. If that is a bargain for the Shenks, it's less of one for 
the public. 


"Sol A. Shenk, 83, Merchandiser Who Built a 700-Store Empire," The 
New York Times, September 1, 1994

By JOHN HOLUSHA

Sol A. Shenk, who built a single surplus outlet in Columbus, Ohio, 
into the Consolidated Stores Corporation, an empire with more than 
700 stores and annual sales of $1.1 billion, died yesterday in 
Columbus, his hometown. He was 83.

The cause of death was a heart attack, said Brady Churches, the 
company's president. 

Mr. Shenk was best known for his purchase of the remains of DeLorean 
Motors, the automobile company founded by the former General Motors 
executive John Z. DeLorean.

When DeLorean Motors filed for bankruptcy in 1982, Mr. Shenk bought 
the remaining stocks of the exotic-looking cars with the stainless 
steel exterior and as many spare parts as he could find.

"We bought about 2,500 cars and 150 trailer loads of parts and sold 
every one of the cars," Mr. Churches said. "We sold about half of 
them to car dealers and retailed the other half."

The DeLorean was not Mr. Shenk's only encounter with a car with 
upward-opening doors known as "gull wings." In the mid-1970's he 
bought what remained of the company that manufactured the Bricklin 
sports car and apparently did something that neither Mr. DeLorean nor 
Malcolm Bricklin had been able to do: make money by selling parts to 
car owners.

Mr. Churches said the company that would become Consolidated Stores 
was founded in 1967 by Mr. Shenk, who bought odd lots of merchandise 
from production overruns, bankruptcies and overstock and sold it 
through the store in Columbus. As the business grew, he bought and 
sold vans, jeeps, office equipment, Veg-o-Matics and stocks of car 
parts, adding stores along the way.

Today the company, based in Columbus, operates stores with names like 
Odd Lots, Big Lots, All for $1 and It's a Deal.

Mr. Shenk tried to start a cable television home-shopping network in 
the Columbus area in 1988, but lack of response caused it to fold 
after a few months. "We had to sink a lot of money into it or get 
out, and he decided not to be in the television business," Mr. 
Churches said. "He was a little ahead of his time."

Mr. Shenk retired as chairman of Consolidated in 1989 but retained 
the title chairman emeritus. "He still came and visited," Mr. 
Churches said. "He had a caretaker attitude toward the company."

Mr. Shenk is survived by his wife of 56 years, Florence; his sons, 
Charles, Richard and William; his sister, Sarah Greene of Great Neck, 
L.I., and eight grandchildren.


DeLorean Sale Cleared," The New York Times, November 17, 1982 

DETROIT, Nov. 16­A Federal bankruptcy judge here cleared the way
today 
for an Ohio auto parts company to purchase the United States assets 
of the DeLorean Motor Company for $1.5 million, plus assumption of 
about $9 million in debt.

The sale, which yields DeLorean¹s secured creditors about 3 cents
on 
each $1 in debt, gives Consolidated International Inc. of Columbus, 
Ohio, ownership of 649 cars with an estimated retail value of $17.5 
million; spare parts worth another $1.2 million, and sole United 
States distribution rights.

DeLorean Motor filed for protection from its creditors on Oct. 25, 
six days after John Z. DeLorean, its founder, was arrested in Los 
Angeles on Federal drug charges. The British arm of the company was 
ordered liquidated by the British Government on Oct. 19.

In his decision to allow the sale, Judge George Woods said the case 
was complex but a timely decision was required. "The DeLoreans could 
almost fall into the category of a perishable item," he said.

Attorneys for Consolidated, which is headed by a 70-year-old 
investor, Sol. A. Shenk, disclosed in court that the company had also 
purchased 1,090 cars from the British receivers and would sell them 
in this country.

Mr. Shenk has also made an $80 million offer to lease the DeLorean 
factory in Northern Ireland, to resume operations there at a reduced 
rate. 



Claude
00570