When Cyrus Hassankola moved to Dallas a couple of years ago, after successfully going out of business in several locales, he decided to settle down and go out of business permanently.
"The response was good from Day One," the carpet salesman says.
Customers rooting through the stacks of Oriental rugs in the store he opened on a busy road in North Dallas would sometimes say how sorry they were that he was going out of business. "We're not," Hassankola told them. "It's just the name of the store."
A business literally called Going Out of Business didn't sit well in some quarters, one of them the Texas Attorney General's Office. So Hassankola -- for a limited time only -- has stopped going out of business.
Now he's running regular "total liquidations" that "beat every going-out-of-business price." In his vocation, this is established practice. But the arrival of hard times has thrown the survival of the going-out-of-business model into doubt. Everybody else is slashing prices as if there's no tomorrow. Old-line going-out-of-business businesses are lost in the crowd.
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And their best customer -- the American trained to pay the advertised price -- has taken to haggling. America's Research Group, a South Carolina polling company, says 72% of 1,000 consumers interviewed in February had haggled in the past year (31% is the historical average), and they reported getting deals 80% of the time. Last year, only half the retailers they took a shot at caved in. Hassankola spots the trend whenever he rolls out a rug.
"That's pretty -- let's take it," a woman named Mary was saying to her husband, Jerry, on a Saturday afternoon in the store. They were studying a $4,200 hand-knotted carpet selling for $2,179. "I definitely don't like that price," said Jerry. Mary whispered, "See if he can make you happy."
Hassankola's helper, Hamid Moradi, tapped a calculator to set the "liquidation" price: $1,526. Jerry jiggled his keys. Moradi said, "Make it $1,000. If you love it, take it home." Jerry stared.
"I think you have to pay for it," Mary whispered. Jerry said, "No, we don't."
And they didn't. Moradi let them take the rug home, to see whether it matched their furniture.
As they left, Hassankola brimmed with optimism for a quick rebound in distressed sales. A slender man, 43 years old, he speaks with candor. "At last, they're bargaining," he said. "Now we must wake them up. Come back! Buy again! They think they're playing a game. I know. I'm part of this game. If I say no, I'm a liar."
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Except for connoisseurs, most buyers know only what they "love." A seller can size up a buyer and decide what he's likely to pay. In business school, it's called "price discrimination." Hassankola has learned that lesson: He went to business school in Switzerland. When he finished, in 1991, he took a job in a Zurich rug warehouse.
The smell -- barnyard and mothballs -- stirred memories of his grandfather's rug store. That was all he knew of the trade, but he had studied the beauties of going bust. Zurich was known as a trading post for wealth escaping Iran in the guise of carpets, which were piling up in fixed-price shops. Hassankola hooked up with one of them, packed it with stock and advertised an emergency shutdown.
The place stayed open for months and "made tons of money," he says, adding: "If a store is closing forever, people believe they can squeeze you. It is the power of words."
Hassankola says he reprised his act in Zurich four times, then opened a store of his own there and went out of business in 1999.
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Retailers unravelCNBC discusses which stores could go out of business. Jewelers, watch out.
Continued: Can't stay in business by going 'out of business'
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