Get ready for ‘Son of C-Mart’

Posted: 7:34 pm Tue, February 2, 2010
By Liz Farmer
Daily Record Business Writer

Keith Silberg’s business model isn’t exactly bank-friendly, but it works for him.

“When you have to make a decision at 9 o’clock at night on a Tuesday and pay for it right then, you don’t exactly have time to call up a financier,” he said.

Silberg’s father and uncle founded Baltimore area discount retailer C-Mart, which went out of business in 2008 after a new owner tried to modernize the company online. Now Silberg is taking what he calls a “back to basics” approach to discount retailing and Wednesday is opening The Big TARP, a discount retailer and auction house in C-Mart’s original Forest Hill location.

The store is entirely financed by Silberg, whose family still owns the retail space, and he is using his own savings to purchase the merchandise. Discount goods come to the Big TARP via Silberg’s contacts in the retail industry, who kept calling him even after C-Mart closed.

Recently, a truckload of flat-screen televisions on its way to a major electronics retailer was a day late arriving and became an insurance claim for the freight company. Silberg got the phone call and immediately bought them from the freight company for a fraction of the price. They’ll be on sale Wednesday for around $300 each.

“It just got to the point where it just doesn’t make sense to say no to these people,” he said. “I just can’t turn this down — it’s in my blood.”

It’s a business where you have to make quick decisions and have the financial wherewithal to back them up. Just as it was with his family’s company, Big TARP acquires most of its discount goods through insurance claims or bankruptcy sales. A Carmen Marc Valvo dress with a $355 price tag on it is hanging on the store’s $25 dress rack. Silberg said a shipment of riding lawn mowers coming in next week (another insurance claim from a major retailer) will sell for about $200 each.

The Big TARP’s predecessor was established in Forest Hill, then relocated to Joppatowne in 2005. Under new ownership, a second C-Mart opened in Landover in 2007 but closed in March to focus on Web site sales. But then the economy took a turn for the worse and not only did the new Web site idea die but the store itself could not survive.

Meanwhile, Silberg bought an auction company, Isennock Auction Services Inc., and began running auctions out of the empty Forest Hill store after a deal to sell that space fell through. In addition to discount retailing, the Big TARP will also host auctions Wednesday nights, and Silberg will run Isennock auctions, which feature more high-end items, at the site about once a month.

The business model makes for an eclectic array of merchandise that’s always changing and requires Silberg — whose business phone is his cell phone — to be on call at all times and ready with his checkbook. But the uncertainty of where his next shipment is coming from doesn’t faze him.

“It’s always interesting, it’s always different and my phone could ring at any time,” he said. “I don’t sweat it.”

Mike Kraus, a retail consultant and founder of Los Angeles-based Store Touch Retail, said that aspect of Silberg’s business allows him to remain relevant because there’s always something new to promote.

“The beauty is, from the consumer perspective, there’s always a reason to visit because you never know what you’re going to find there,” Kraus said.

And despite the fact that his family’s first company went out of business after new ownership, Silberg said he doesn’t believe the Big TARP will meet the same end. While he’ll be updating the store’s Web site every night with new inventory and pricing, Silberg doesn’t plan to use the Web as a place to make sales, as C-Mart’s last owner attempted to do.

“The process of getting to that point was very expensive, and they were heavily financed,” he said. “Then the economy tanked and I think all those things put together … was too much for the company to bear. This is a very much back-to-basics approach.”

Kraus said sticking to in-store sales could be “increasingly difficult” in a world where online shopping is the norm and mobile shopping (using a cell phone connected to the Internet to shop) is now taking hold.

But he also said The Big Tarp could withstand that test because, unlike big-box discount retailers like Target and Wal-Mart, Silberg’s business distinguishes itself by offering brand names and a shopping adventure.

“Think this particular concept is one of those off or unique kinds of concepts that may not fall into this e- and m-commerce kind of thing because you kind of want to go there and discover,” Kraus said. “If you can create that environment of ‘discover and find out what new,’ that’s a win.”