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The original predecessor company to Crazy Eddie was ERS Electronics founded by Eddie Antar, Sam M. Antar, and Ronnie Gindi (a first cousin) in 1969. The original store was located on 1117 Kings Highway in Brooklyn. The company operated under the name of Sights and Sounds.
It was not until a co-worker of Eddie's first wife Deborah Joyce Rosen recounted to her that he buys his merchandise from "Crazy" Eddie did the company change its name to Crazy Eddie in 1971.
Originally the store was not a discount electronics store. At the time Sights and Sounds started business, consumer electronics was "fair traded" which meant that all retailers had to sell their products at the same price. Smaller retailers like Sights and Sounds were at a very big disadvantage due to the greater advertising power of the larger retailers.
Around 1970-1971, Eddie would buy out his cousin and own 2/3 of what would became Crazy Eddie. The company was still struggling so the fact that Eddie controlled 2/3 of the company and his father controlled 1/3 was not a big deal then. However, later as the business grew and became a powerhouse electronics chain in the northeast corridor of the United States, Eddie would displace his father as the patriarch of the family. Jealousies would eventually lead to the downfall of the Antar clan.
To survive Eddie resorted to circumventing the fair trade laws and discounting the consumer electronics he was selling. He faced retribution from the manufacturers who stopped shipping him merchandise. However, he built up great customer loyalty in the process. He would purchase his merchandise from trans-shippers and grey markets if manufactures would not ship him products.
Eddie Antar was a retailing revolutionary in his day as he broke the price fixing that gripped consumer electronics. Customers rewarded him handsomely as his business volume expanded.
However, like many other independent small businesses in America, Crazy Eddie, paid many of its employees off the books. There was a culture that said nothing should go to the government. Any profits left over would not be deposited into the bank, but would be skimmed by the Antar family.
Eddie Antar, the retailing revolutionary was a ruthless competitor. His prices really were insane for his competition. He ran one of the largest advertising blitzes ever known in the tri-state area.
However, he still had to make money. In a variation of the old style "bait and switch" high pressure sales persons would "steer" customers to higher profit margin merchandise after being baited into the stores by our "beat any price" policy. Crazy Eddie had internal policies called "nail at door" "sw" for "switch the customer" "lunch" for repackaging used merchandise to sell as brand new.
In the early years you had to be a relative, a friend of the family, or a friend of a friend, to work for the company. There were no "employees." Rather we were called "Crazy Eddie people." A separate insular company culture evolved. Everyone was part of the Crazy Eddie family. Crazy Eddie even had its own language which was a combination of Arabic, pig Latin, and other retailing slang which was handed down from the Antar family's multigenerational merchant roots.
"Shoof the husho" which was derived from Arabic meant watch the thief of look out for the shoplifter. "Nehdi" was the term used for currency. In the early years there were no punch clocks. Eddie would often take the entire company out to dinner (up to 200 people) every Friday night in Brooklyn.
Eddie Antar was a very aggressive sales person and his sales people learned fast from him. It was not uncommon for Eddie to follow customers out of the store in order to talk them into buying merchandise. Soon Crazy Eddie would have a N.A.D. policy (nail at the door) or nobody walks policy in which a sales person would be stationed at the exit door in a last ditch effort to sell the customer.
If the original sales person would not succeed with the customer in either making a sale or S-W-ing (switching) the customer to a more profitable product, another sales person would T-O (takeover) the customer. Finally as described above, we utilized our third line of attack which was the N.A.D. person who whose job it was to "nail the customer at the door" in an attempt to make the sale (Crazy Eddie term beha).
If the merchandise was not in stock and a floor item was available or customer return was on premises (for return to manufacturer) and the customer was insistent on having their merchandise immediately we would "lunch" or repackage the merchandise as brand new. The term lunching came when Crazy Eddie had a single store and in such a situation as described above Arnold Spindler would tell me it was time to take my lunch break. I would have the repackaging materials inside my lunch box or bag.
The motto was to "make the beha" or "nobody walks" or to make every sale no matter what. Eddie Antar and his family were involved in skimming money from the company from its origins. In the worst case scenario, where we could not switch the customer to a more profitable item, the Antar clan could always pocket the sales tax on cash sales by not depositing the proceeds in the bank and disclosing such sales.
Eddie was always accessible to his "Crazy Eddie family." If you had a problem, you went to Eddie and he took care of it. After the Christmas holiday season he doled out large cash bonuses. He developed a cult leader type status. Everyone looked up to him. He would be accurately described as a "larger than life Fonz type figure" in a dramatization of the Crazy Eddie saga on Court TV's Masterminds Series by Howard Sirota who lived near and knew of Eddie in his youth and would eventually as head Attorney of the Class Action Litigation help bring him down.
His nickname was Kelso (named after the race famous race horse by the first outside the family employee, Arnold Spindler). Within the Antar clan he took over his father Sam M. Antar's place as the patriarch of the family as more and more relatives came to work for the growing and prosperous company.
As a "larger than life figure" Eddie Antar was a great leader who inspired intense loyalty from his people. It was us against them. Them - meaning customers, the government, insurance companies, auditors, and everyone else who did not serve the company's interests.
Eddie would often tell me, "People live on hope." The Antar clan ruling Crazy Eddie and top management as criminals would exploit the hopes and dreams of others in the pursuit of money and power.
It was said that on a recent Court TV show called Masterminds that Crazy Eddie "had more floods and fires than the bible." To clarify that point we never had any fires nor deliberately created any floods. However, when a flood or other insurance loss situation arose, Eddie and his ruling family were quick to take advantage and over-state the loss of any claim. When a store was burglarized for example, and 100 pieces of merchandise were stolen, Crazy Eddie would claim that 300 pieces were stolen on the logic that if the thief were caught who would believe them. Watered down merchandise from previous losses were reused in new water claims.
Many criminologists analyze white collar crime using the fraud triangle/diamond concept:
The fraud triangle:
• Incentive
• Opportunity
• Rationalization
The fraud diamond:
• add the concept of capability
However, the criminality in the Crazy Eddie frauds involved no rationalization. It was pure and simple greed. The crimes were committed simply because we could.
It should be noted that very few persons who worked at Crazy Eddie was involved in any of its criminality such as being paid off the books, skimming, insurance frauds, financial frauds, etc.
However, to create a profitable business and permeate a culture of deceit, we rationalized it with such unwitting people that there was nothing wrong with switching a customer to a more profitable item of "greater value" even if the customer's original intent was to buy a specific item at our "low ball" price. We would pay "spiffs" or sales commissions to sales persons to sell highly profitable extended warranties with low loss occurrence rates to customers. Sales persons were instructed to "drop line" or haggle with customers on prices listed on items in the store. Does it mean that if you did not say anything to a sales person you paid a higher price?
Worst yet, Wall Street during their due diligence process and the financial analysts bought into our spin. It was a normal process to haggle with customers. To them it and others it was not "bait and switch." It was helping the customers get the best value and at the same time increase our sales and profitability. After all, we did not advertise prices. We simply said, "Get the best prices you can find and then come to Crazy Eddie and we will beat it." Well, what happened afterwards is the real story.
Think about the term "culture at the top."
