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“The Story of Warehouse Ninety-Nine and The Dollar Star”

Warehouse Ninety-Nine and The Dollar Star were started based on a mission: “To provide customers with value for their dollar, selection and an enjoyable shopping experience.”

A partnership team for over twenty (20) years, Martin Goldman and Kenneth Haber founded Warehouse Ninety-Nine and The Dollar Star in 1991. Prior to that, Martin and Kenneth owned and operated a three-store chain of discount/grocery stores named Shop Rite, which was founded by Martin’s father, Hillard Goldman. They built this business with innovative marketing techniques, which included using loss leader products to generate store traffic and locating stores in close proximity to retiree communities. Retirees proved to be valuable, but educated, consumers that pushed Martin and Kenneth to make astute buying decisions in order to remain competitive. This experience built their knowledge of discount goods and honed their buying skills. They believe that it was this experience that prepared them for their future success.

However, competition was fierce and continued to mount as mega store chains such as PharMor and Freddy’s came onto the scene. Sensing the strength of these highly organized and well-funded competitors, as well as tiring of the grind of the discount retail environment, Martin and Kenneth sold their stores. Their efforts were now focused on wholesale distribution, avoiding the rigors of retail. During this period, they continued to leverage their buying expertise and served as suppliers to the new owners of Shop Rite, as well as other retail chains.

Martin and Kenneth soon realized that “they couldn’t seem to get retailing out of their blood.” In 1990, Martin, with his wife Sheri were introduced to an intriguing new retail concept. The concept was based on a single price point of $1.00 with merchandise ranging from toys to hardware to house wares and even groceries. Martin and Sheri tested the concept at local flea markets using small quantities of merchandise. The results were invigorating! Customer loved the single price point. Martin and Sheri repeatedly heard elated customers exclaim, “This is only a dollar!” No more haggling with customer over the price of Tylenol at competing stores. No more comparisons at all; just happy, grateful customers. Retailing could be fun again!

Encouraged by the prospect of this new concept, Martin and Kenneth leased a warehouse in Miami and formed Warehouse Ninety-nine. The idea for the name of the company (instead of “Warehouse One Dollar” or something of the like) was based on Martin and Kenneth’s realization that a penny on sales of $1 million equaled $10,000. They wanted that penny!

The first Dollar Star store was opened in 1991. While Sheri ran the store, Martin and Kenneth concentrated on learning the merchandise and started buying with a vengeance. They attended the General Merchandise Trade Shows around the country and quickly filled their new warehouse with merchandise, all the while testing and tracking each new item through their own retail store. The store itself was thriving and soon other retailers began to take notice of this new concept. Always aware of potential opportunities, Martin and Kenneth posted a notice in the store, “Buy Wholesale and Save.” Soon, many were inquiring, “How do I open a dollar store?” Over the next four years, Martin and Kenneth worked on perfecting the business. They were students of merchandising, scouring the country for merchandise suitable for The Dollar Star. The item had to be bought low enough to sell at $1.00 and still earn a healthy profit margin.

They also recalled from their Shop Rite experience that health and beauty aids, and groceries (consumable products) were well suited for dollar stores. While other wholesalers and distributors were concentrating on mostly imported items, such as toys, kitchen gadgets and hardware, Martin and Kenneth decided to fill their stores with consumable items. After all, how many $1.00 can openers could one household use? But if someone were using generic Ibuprofen or household cleansers on a daily basis, they would return to the Dollar Star more often. This strategy helped them establish their niche in the dollar store market.

Along the way, they were surprised to learn that some of the distributors they were buying from knew Hillard Goldman from many years ago. Martin and Kenneth built on this relationship, reassuring prospective wholesalers that they operated their business with the same integrity as Hillard Goldman. As they renewed old relationships, they forged many new ones, always getting past salesmen to the owners. They accomplished this by proving themselves to be educated, intelligent businessmen. Today, Martin and Kenneth are highly respected in the wholesale arena, known as honorable but shrewd businessmen who always pay their bills on time.

As Martin and Kenneth learned the wholesale business, their lone retail store also became profitable. They initiated a strategy whereby they would open a retail store and sell it shortly thereafter, with the goal of retaining the new retailer as a wholesale customer. In 1996, Martin, Kenneth and Sheri decided that after achieving the solid success of the wholesale operations, it was time to change their strategy concerning retail stores and begin to retain them as their own. Furthermore, Warehouse Ninety-nine would be the sole supplier to all of their retail stores. Under the advice of seasoned multi-unit retail storeowners, they recruited Ralph Lobodzinski, a seasoned manager from rival dollar store Dollar Bill’s to serve as their District Manager. Using the stores they had built and sold as an operational blue print. The team set out to open more retail units.

Dollar Star grew from two to 15 stores over the next five years. Martin was the primary lease negotiator, successful in developing relationships with, among others, shopping mall giants DeBartolo Group and The Mills Corp. Ralph and Sheri develop standard operating procedures, policy manuals, a system of internal controls, and centralized financial reporting capabilities. Additionally they implemented employee incentive programs that rewarded employees with both financial and recognition awards. Managers were held accountable for sales and inventory goals, which determined in part, their bonus awards.
Sheri implemented computerized accounting and financial reporting systems for the wholesale and retail operations. She also built a solid accounting and bookkeeping staff whose professionalism is unsurpassed in the business arena. In 1999, Sheri successfully recruited Gela Kreindler from the Company’s independent accounting firm. Ms. Kreindler serves as the Company’s Controller.

In 1998, volume had gotten to the level that Warehouse Ninety-nine purchased a new, larger warehouse. The new warehouse was selected in part due to the fact that it is located in clear view of a heavily trafficked expressway in the Miami area, providing incredible exposure for the Company. The Company continues to grow, now employing a combined 150 people in its wholesale and retail operations. Employee turnover has been and continues to be low, with nearly all management level employees having been with the Company for a number of years. Martin and Kenneth hold the belief that the Company can grow to 20-25 retail stores with its existing staff.

In summary, the Company has been founded on the efforts of shrewd buying, innovative merchandising and integrity in its dealing. These efforts have placed Warehouse Ninety-nine and The Dollar Star in a position to continue solid sales growth, while maintaining consistently strong profit margins.