99 Cents Creation Returns, but Struggles in New Location

Photo by Heather Dubin Back in business: 99 Cents Creation owner Afsar Khan, left, and General Manager Mamdou Diaman.
Photo by Heather Dubin
Back in business: 99 Cents Creation owner Afsar Khan, left, and General Manager Mamdou Diaman.

BY HEATHER DUBIN  |  The shelves at 99 Cents Creation are stacked with gold paper plates, boxed pulpo (octopus) and pliers. Owner Afsar Khan is dedicated to finding the lowest priced household goods and supplies possible for his customers, and strives to sell his inventory for under a dollar.

Previously located on 23rd Street between Seventh and Eighth Avenues for 14 years, Khan, who was unable to afford a triple increase in rent, was forced to move 99 Cents Creation over to 24th Street (mid-block between Sixth and Seventh Avenues) this past May).

Photo by Heather Dubin Owner Afsar Khan holds a sign that’s used to draw customers to the new 24th St. location.
Photo by Heather Dubin
Owner Afsar Khan holds a sign that’s used to draw customers to the new 24th St. location.

In a recent interview, Khan spoke candidly about the new space, and how he may have to leave if business does not pick up.

Originally from New Delhi, India, Kahn used to sell and export Indian handicrafts. His start in the 99-cent business began in 1998 when he worked for a discount store in New York before opening his own.

Kahn, who lives in Rochester, opened his first 99 Cents Creation in White Plains, and was there for five years. A store in New Rochelle followed, and when that lease expired after seven years, the renewal went to Citibank instead of him.

After securing a ten-year lease in 1999 at 23rd Street, Kahn flourished there. When it came time to renew his lease in 2010, he was able to work out a deal with the sublease owner and remain month-to month, which he did for two years.

“They were looking for more rent, and wanted $30,000 a month,” he said. Under his ten-year lease, Kahn paid $7,000 in rent for his first year, with a three percent increase for each successive year, plus taxes.

During his interview with Chelsea Now, Kahn produced the final rent check for his 23rd Street store (not cashed, since the $11,604.83 was taken from his security deposit). “When I see this check, I really feel it, because I was really making money in that location to support my family,” Kahn said. “I have four children, and two are in college.”

Kahn pleaded with the sublease owner to remain at 23rd Street, noting he was a good tenant and always paid rent on time. But according to Kahn, the sublease owner was unyielding, and told him, “I know, but it’s business.”

Currently, the business able to swing that unobtainable rent for Kahn is 7-Eleven. “They’re [7-Eleven] paying almost $25,000 for a couple of years. I think they have a deal to increase in a couple of years too,” Kahn said. He also speculated that the owners of 7-Eleven spent $100,000 to fix the space prior to moving in. “I can’t afford that,” he added.

Kahn has a ten-year lease with a five-year option, and rent is $10,800 a month, including taxes, at 24th Street, which is a smaller space. But while the rent may be less, customer traffic to 99 Cents Creation is not what it used to be. The old spot had 300 to 400 customers daily, with an average purchase of $10 to $15. On the quiet block of 24th Street, Kahn sees less than 200 customers daily, and an average purchase is $5 to $6. “Here, I’m in very bad shape,” he said.

Because the new location is near a Whole Foods (on 23rd Street and Seventh Avenue), Kahn thought he had the market cornered for discount products. “My math failed. My calculation failed. I thought there was no competition because of the price range. And I’m close to where I was the last 14 years. That counts,” he said.

Kahn has hired a man to walk around the 23rd Street and the surrounding area with a sign announcing the new address. However, many familiar faces have yet to appear.

“We’re requesting people tell their friends, but my sales are stuck. It’s bothering me,” Kahn said.  He wanted to stay in the neighborhood to remain loyal to customers who were upset when he closed the 23rd Street store. “That brought me back here. Unfortunately, I’m not getting enough business to meet my expenses,” he said, noting that his staff has been whittled down to one cashier and one person on the floor, to help control expenses and survive.

If the store does not experience a customer boom in a couple of months, Kahn will need to go elsewhere. “I’m looking now for a corner located on Eighth Avenue,” he said. “If I can find one, I will honestly move. I don’t know if it’s possible because people are asking so much for rent.”

Photo by Scott Stiffler Promises made, and kept: This sign hung on the old 23rd St. store, now occupied by a 7-Eleven.
Photo by Scott Stiffler
Promises made, and kept: This sign hung on the old 23rd St. store, now occupied by a 7-Eleven.

Additionally, Kahn feels that 99-cent stores are at a disadvantage with landlords. “People don’t have a good impression with the tenant as a 99-cent store. They think their value will go down. They want more rent, and rich tenants like a bigger store,” he said.

Kahn has another 99 Cents Creation in the Bronx (on Third Avenue and 163rd Street), where he is able to meet his rent and pay bills.

Kahn attributes his ability to sell items for less to his expertise. He searches for the least expensive distributor, which he refers to as the “backbone of the business.” Once he finds the best deal he can, Kahn marks up each item 20 to 25 percent.

From experience, Kahn has discovered that merchandise will not sell at a higher price — although some brand name items such as cleaning products are three to five dollars. “Customers want it cheap because of the economy,” he said.

“These people are very happy when they do their shopping. They pay $20 and leave with a big bag,” he said, adding that one cannot do that at Duane Reade.

A favorite customer item is olive soap, for $1.49. Kahn would not admit to liking one particular thing. “Every item is a favorite for me because I buy with my heart. I want to make sure it will sell,” he said.

Kahn’s main concern is quality for the best price. “I’m the only person selling in this neighborhood for these prices and this range. I have so many items, and the quality is not junk,” he said.

This is why Mamdou Diaman, store manager, who is from Senegal and has five children, ages five to 15, has worked for Kahn for eight years. “One of the reasons I stay with this boss is because of the way he picks the items, and also the variety,” he said. “The difference between my boss and other 99-cent store managers is that he cares about the quality when people shop.”

Diaman’s favorite item in the store is the pulpo in marinara sauce, which he buys every week. Earlier that morning he ordered six cases to replenish the stock. Lately, customers have been buying lots of paper goods. “Once they come in, they will always pick up something,” he said.

Diaman was more optimistic than Kahn about the new location. He mentioned that scaffolding, which had obscured the storefront, was recently removed. Also, Diaman is hopeful that two new bars slated to open around Christmas will transform the dimly lit block.

“I just feel when you are not on the main street, the recovery time will take longer for people to find you,” he said. “Every day we have new people who are referred by the old customers. They’re really helping us to spread the news that we’ve moved.”