JOE AND RACHELLE FRIEDMAN aren't worried. They've seen
competitors like Newmark & Lewis come and go. Crazy Eddie's out of business,
and The Wiz is still around, but only after a bout with bankruptcy.
The Kings Point couple, who used their wedding money to found J&R Music and
Computer World 30 years ago just to make a little money on the side, are not
fazed by the economy and turbulent stock markets. They've seen them surge and
falter many times before.
The secret to their success? Understanding their customers, they say.
"We're one location, with the bosses on the premises. Our buyers are
constantly going into the stores to speak and interact with the customers,"
said Rachelle Friedman."We know how to listen and anticipate our customers'
That approach has propelled the family-owned retailer from a tiny
storefront on Park Row in 1971 to a mega-merchant that now takes up nearly an
entire city block and generates $325 million in annual sales.
That business has been built with loyal customers such as David Rivera, who
said that while J&R Music and Computer World is nowhere near his Jersey City
home or Madison Avenue office, he has trekked to the downtown landmark nearly
every other week for the past decade. He spends thousands of dollars there a
year because he says he can pick up music and software that's either hard to
find or more expensive elsewhere.
"J&R has a larger selection, and if you don't see it, they can order it in
most cases," said Rivera, as he clutched six compact disc soundtracks of the
Babylon 5 television series that he couldn't locate at The Wiz or Sam Goody.
J&R, first opened at 33 Park Row near City Hall as a 500-square-foot
store, has not only survived, but thrived, in the New York City-area's
cutthroat consumer electronics industry. The company lures shoppers with its
reputation for a knowledgeable sales staff, its high-tech offerings and wide
range of software and music titles.J&R is also unusual in several ways. It's
one of the few sizable electronics retailers with only one location, but it's
known nationwide because of its distinctive advertisements and a catalog it
mails to more than 1.5 million people.
Also, unlike most of its rivals, J&R divides its products among separate
stores with individual entrances and addresses along Park Row. This allows it
to devote almost as much space to one category, such as audio/visual equipment
or computers, than many rivals give to their entire consumer electronics
offerings, the Friedmans said. But it also means shoppers think they have to
walk between stores and line up twice if they want to pay for a Madonna CD and
a portable stereo to play it on. (Many don't know people can pay in one store,
Though they've already built a 300,000-square-foot empire, Joe and Rachelle
Friedman (the J and R in J&R) aren't stopping yet. To kick off J&R's 30th
anniversary, they opened a six-floor computer and technology store on the
southern corner in mid-January. They also have taken over the northern end of
the block, where J&R will open a camera shop in the spring.
Other changes are in store-including the expansion of its corporate
offerings, introduction of home theater installations and addition of more
higher-end products in many departments-as J&R seeks to tap into new markets
and answer customer demands.
"We keep on evolving because we know what our customers want," said
Rachelle, during a recent interview in her office, which is lined with photos
of her with celebrities.
But despite having weathered other storms, industry experts say J&R will
likely face more challenges this year that may make it harder to keep ringing
up the 10 percent growth in annual sales it has enjoyed in recent flush times.
The merchant faces increased competition from rivals with deeper pockets than
the regional players that had populated the New York market in the past. For
instance, Best Buy, the nation's largest electronics retailer, plans to open up
to six stores in Manhattan in 2002.
And the slowing economy may dampen the boom that consumer electronics
retailers have savored for the past few years. A slew of computer makers have
warned that sales, particularly for PCs, are declining. Even the Consumer
Electronics Association, a manufacturers trade group in Arlington, Va.,
predicts sales growth will slow to 6.5 percent this year, compared to an
explosive 9.9 percent rate in 2000.
This means J&R will have to try harder to lure customers to the cash
registers, experts said.
"It's going to require more work than in the past," said Mark Seavy, senior
editor at Television Digest, a Manhattan-based consumer electronics
newsletter. "Businesses and people won't have the open wallets they had a year
The Friedmans, who were born in Israel, grew up in Flatbush and met on a
blind date, never intending to become entrepreneurs. He was an electrical
Polytechnic University, which had just started admitting women, and hoped to
become a doctor.
At first, they just sold electronics, such as stereos and TVs. But as
people asked for records, they began taking requests and opened a music shop in
the basement. Three years later, when Rachelle took a two-week maternity leave
for the birth of their first son, they opened a mail-order business.
The Friedmans said it was tough in the beginning, especially for Rachelle,
who had to battle for acceptance in the male-dominated industry. While her
husband handled store operations, she negotiated leases, bought products and
took charge of finances and advertising.
"When I did business dinners, I was the only female there. Others always
asked to talk to my husband and I said, 'If you want to discuss business, I'm
the one,'" said Rachelle, noting that her freshman year at Polytech, where she
was one of only three women enrolled, prepared her for those situations.
Their first big move came in 1979, when the couple transferred the
electronics and pop music divisions to the second floor of 23 Park Row. They
kept the original shop to sell classical and jazz titles. Over the next decade,
as the Friedmans snapped up more storefronts and even buildings, they expanded
their offerings and brought in new products. They also added warehouses in
Maspeth, which J&R now uses as a distribution center for the stores, as well as
the catalog and Web divisions.
By 1990, J&R was selling everything from stereos to small appliances,
cameras to computers, and of course, many genres of music. It opened its first
stand-alone computer store, which had a separate area for Apple
products-unusual at the time. Six years later, it launched a Web site,
www.jandr.com, run until recently by elder son Jason. The following year, J&R
opened a small satellite space in a Columbia University academic building to be
closer to its corporate clients there.
Over the past decade, J&R has continued to shift the types and locations of
its products as some grew in popularity and others waned. The Friedmans say
this setup has allowed them to cater better to customer demands and provide
more knowledgeable sales staff who are devoted to one specialty.
"You don't stay in business in New York unless you take care of your
customers," said Tom Edwards, analyst with NPD Intelect, a research firm in
Port Washington. "If a customer needs something, J&R goes out of its way to
find it. The people on the sales floor are very well-educated about the
Shoppers interviewed recently complimented the breadth of J&R's selection,
but some said they don't like having to move between buildings or follow signs
like those posted in late January saying video games had moved to 15 Park Row
and home-office equipment had relocated to 1 Park Row.
"Once you get used to a section, they move it to another building," said
Jon Kwong, who lives nearby, as he perused the selection of instrumental
renditions of rock songs.
The Friedmans are proud that they've always bucked industry trends. Over
the years, they've been asked to become a public company and to open other
locations, but have refused.
When it comes to expansion, the Friedmans said they don't look beyond Park
Row because they want to keep tight control over the business and not take on a
lot of debt. And, they want to make sure J&R maintains its distinct style.
"We couldn't be as passionate in a large chain because we wouldn't know the
customers as well," said Rachelle. "We can't duplicate this store somewhere
Going public is out of the question, because J&R would have to focus on its
stock price and profit levels, rather than the business, she added.
As a private company, J&R can carry lower-margin items. "Our classical
music business is not that profitable, but we feel it's the right thing for J&R
and for our customers," she said. "No one carries our jazz selection because
it's not as profitable as Britney Spears or 'N Sync."
With only one location, J&R also has the flexibility to experiment,
industry experts said. J&R was among the first retailers to carry DVD players
and discs, as well as high-definition television sets.
"Having the newest products creates the image in consumers' minds that this
is the place to go for technology," said Barry Sosnick, analyst at Fahnestock
& Co., an investment bank in Manhattan.
This also entices manufacturers to showcase new technology at the store.
3Com, for instance, plans to create a "digital home" in J&R's computer
store in March. The display will showcase high-speed and wireless Internet
connections, and the connectivity between computers, cameras and other
The networking company wouldn't do this at J&R's rivals for several
reasons, said Keith Rostcheck, 3Com's national account manager. Most sizable
consumer electronics retailers have multiple stores with standardized displays.
Also, their staff changes so often it would be difficult to train them.
"The other stores would just put it on the shelf and leave customers to
fend for themselves," Rostcheck said.
These special showcases also help bring people into the store, and this is
increasingly necessary as the Web steals away potential J&R shoppers. While her
business hasn't been hurt by brick-and-mortar rivals, Rachelle said more of
her customers are turning to the Web for the hard-to-find items they might have
purchased at J&R.
To combat this, J&R has expanded the number of events it hosts on Park Row.
For instance, it formed a partnership with Black Entertainment Television to
tape a monthly jazz show and a regular technology program hosted by jazz great
Herbie Hancock in the store.
J&R also uses its Web site to spark increased interest in the store. The
retailer airs a thrice-weekly Web radio program, hosted by veteran disc jockey
Vin Scelsa, from a studio in its rock music store.
The Internet has also brought the Friedmans' two sons into the family
enterprise. Jason, 26, left law school in 1996 to run the Web site, before
stepping down last month. Daryn, 23, recently began hosting one of the live Web
While she's hopeful her two sons will take over the business one day,
Rachelle is not entertaining retirement. A workaholic who turned 50 in
December, she can't detach herself from the store for long, even checking her
e-mail on her personal digital assistant while on vacation.
"There's no way I'll ever retire," she said. "I love it too much."