Jack Luskin is making it rich by being "the cheapest guy in town."

Later this month, Luskin and his family stand to gain between $16 million and $19 million when his 29-store chain of electronics and appliance stores sells stock to the public for the first time.

Only a small percentage -- about $4 million of the total $20 million to $24 million expected from the stock sale -- will be pumped into the stores.

The one-time gain for Luskin -- who promotes his stores as "cheap, cheap, cheap" -- comes on top of the $600,000 he receives annually in salary, bonuses and benefits as the chain's chairman and chief executive officer.

The Luskin family -- including both 28-year-old Cary, who receives more than $400,000 a year as company president, and 23-year-old Kevin, who earns about $160,000 annually as vice president -- also receives $760,000 in annual rental payments for the 12 Luskin's stores located on family-owned real estate.

By selling 1.35 million shares of its stock at an expected range of $15 to $18 a share, the Luskins hope to have the public help pay for an aggressive expansion campaign in the Midwest and New England as well as in the Washington area.

Under the stock offering, Jack Luskin will retain complete control over the company he founded in 1948. After the stock sale, the Luskin Family Investment Limited Partnership, controlled by the older Luskin, will hold nearly 72 percent of the outstanding stock.

"We're very proud of what we've done," said Cary Luskin. "We've worked very hard at building an excellent company. We're very proud of it."

"The company's marketing strategy is to attempt to position itself as the dominant home-entertainment, consumer-electronic and appliance retailer in the geographic areas in which it operates by offering a broad selection of products at competitive prices," according to the recently released prospectus that details the Luskin's finances and its plans for the future.

"We're selling stock to the public to make expansion a lot easier," Cary Luskin said in an interview. With $8 million in cash and short-term investments already in the corporate treasury, the extra $4 million could permit the company to open as many as 26 new stores, according to figures contained in the prospectus.

Luskin's stock offering comes at a time when a number of other consumer-electronic retailers also are selling their shares to the public.

Two years ago, only one publicly held retailer -- Circuit City Stores -- specialized in selling consumer-electronic goods. Today, seven other consumer-electronic retailers, including Luskin's and Crazy Eddie Inc. of New York, have gone or are about to go public.

"Consumer-electronics supermarkets like Luskin's are right now one of the hottest concepts in retailing," said Fred E. Wintzer Jr., a financial analyst with Baltimore-based Alex. Brown & Sons Inc. "In the last four years, there has been an explosion in the number of super specialty stores in the consumer-electronics area. The stores are all benefiting from the phenomenal growth in the demand for new consumer-electronic merchandise."

"Luskin's is on the cutting edge of a new industry," said Kenneth M. Gassman Jr. of Wheat, First Securities Inc. "Twenty-five to 30 percent of the items they and other consumer-electronic stores are selling today didn't exist in the mass market five years ago. Videocassette recorders were either nonexistent or selling at such high prices they were being bought only by technical specialists. Digital audio discs didn't exist five years ago; two years ago, they were selling for $1,100. Last week they were selling below $200."

The new technology, coupled with the sharp price reductions, have made the industry one of the fastest-expanding segments in the retailing market, growing at an annual rate of 20 percent, according to figures compiled by Kidder, Peabody & Co. In 1981, $12 billion worth of consumer-electronics merchandise was sold nationwide. Last year, sales exceeded $23 billion.

"The tremendous growth . . . will eventually moderate," with annual gains ranging between 10 percent and 12 percent, predicted Beth A. Semmel of Kidder Peabody. Even so, that growth rate is far above the single-digit projections most financial analysts are making for other segments of the retail industry.

The high-volume nature of the business is one reason for its growth. "With high volume, they can lower their prices and still maintain good profits," Gassman said. "The people who suffer are the department stores who have high rents and the mom-and-pop stores who don't have high volume. Both have to keep their prices high" to cover their costs, Gassman said.

What's more, he added, there is plenty of room for growth because the industry is highly fragmented. "There is no major national retailer dominant in the consumer-electronic industry."

Semmel calculated that the nation's largest consumer-electronics retailer -- Circuit City -- accounts for less than 2 percent of total industry sales; Luskin's ranks 29th in size. Together, the top 40 retail chains account for only 26 percent of the industry's volume.

Luskin's 1984 sales from televisions, video equipment, microwave ovens and major appliances such as refrigerators, dishwashers, air conditioners and washing machines, totaled $90 million from its 29 stores -- a 160 percent increase over 1980, when sales tallied $34 million from 16 stores. Profits for 1984 came to $4.2 million (94 cents a share), compared with a profit of $117,000 (3 cents) in 1980.

Much of the growth in revenue and profits is the result of Luskin's recent acquisition of two large, but financially troubled, companies. In 1981, Luskin's bought George's Radio & Television Inc., which had been posting big operating losses and had been unable to satisfy creditors' claims. And last year, Luskin's expanded into the Midwest by purchasing the five-store, Cleveland-based chain of Tokyo Shapiro, which was being reorganized under Chapter 11 of the federal bankruptcy code.

Although George's operations have incorporated into the Luskin's name, Luskin's does not plan to rename Tokyo Shapiro. In fact, it plans to expand that chain to Hartford, Conn., with the opening of four new stores this year. Luskin's selected Hartford as a new market because it believes there are no other major consumer-electronic retailers in the area.

In all, Luskin's plans to open 11 new stores this year, including four in the Washington metropolitan area.

Further acquisitions are possible, the prospectus says. It adds, however, that "the company is not currently engaged in any acquisition negotiations."

Luskin's growth has not come without problems. Prompted by a number of complaints filed at local consumer affairs offices, Maryland's Attorney General's office has accused the company of engaging in a variety of fraudulent sales practices.

Maryland Assistant Attorney General William Leibovici said in an interview that since 1979, his office has received more than 1,200 complaints concerning Luskin's sales practices. On behalf of those complainants, the state filed a lawsuit against Luskin's in 1981. The lawsuit, which is scheduled to go to trial this September, alleges that Luskin's engaged in bait-and-switch tactics by advertising low prices for brand-name products to attract customers and then trying to sell the customers other goods once they came to the store.

Luskin's sales personnel "made little or no effort to sell the advertised appliances," the lawsuit charges. "Instead, they were encouraged to, and routinely did, attempt to sell consumers who responded to the advertisements other non-advertised appliances on which Luskin's would earn higher margins of profit . . . In order to earn the substantially higher commission paid on non-advertised appliances, Luskin's sales personnel disparaged or made false statements about the advertised appliances in a manner calculated to discourage their sale. . . . In some instances, they respresented to consumers that advertised appliances were not available when they, in fact, were available."

Additionally, the suit charges, Luskin's frequently failed to make timely repairs to appliances, including those covered by warranties and Luskin's service contracts. "Many consumers had to wait months before their appliances were repaired and returned to them. Other consumers had to return their appliances for the same repairs on multiple occasions."

In some cases, the suit continues, Luskin's sold previously used and repaired appliances without disclosing their condition.

"We made 2.5 million transactions last year," Cary Luskin responded. "The number of complaints we get are just miniscule compared to that."

"Management believes that it is unlikely that the Maryland Attorney General will prevail," the prospectus adds. But the loss of the lawsuit "would not have a material adverse effect on the company," the offering statement contends.

One thing is clear, however, Jack Luskin will remain the key figure in the company.

Although 60 percent of the Luskin Family Investment Limited Partnership is made up of stock now held by Cary and Kevin -- who bought their shares earlier this year at $1.99 apiece -- Jack Luskin is the sole general partner of the partnership, "with sole voting and investment power with respect to the assets of the partnership," the prospectus says. "Consequently, Mr. Luskin will control the company, will be able to elect all of the directors of the company and could approve certain corporate transactions, such as mergers, sales of assets and similar material corporate transactions, without the concurrence of any minority stockholders."

Despite his continued control, the prospectus said that after the stock offering, Luskin and his sons no longer will be able to take advantage of a series of beneficial financial arrangements they now have with the firm.

Among those arrangements are the real estate fees Luskin's now pays Jack Luskin, individually or to limited partnerships he controls. These fees, for 12 store locations, totaled $778,241 last year. Luskin will continue to receive money for the leases he now holds, and for three sites the Luskin family previously had committed to develop or expand, worth a potential $900,000 by 1989.

However, the prospectus said, "it is the present intention of the company not to enter into additional real estate transactions with members of the Luskin family after this offering."

For the past few years, Luskin's has advanced money to the real estate partnership and the three Luskins -- either at no interest or at 8 percent a year.

For 1984, Jack Luskin received $486,000; Cary, $197,000, and Kevin, $10,000.

These loans "will be repaid concurrently with the closing of the stock sale," the prospectus said.

Financial deals such as these are not unusual for a privately held, family-run company, Gassman said. "The family uses the real estate as a tax shelter and the family takes loans from the business as well. That is especially so in retailing, where the business is built around people, in contrast to a mnaufacturing firm, where a business is built around a particular product."

At other private electronics retailers that have also gone public recently, such as Crazy Eddie, the financial deals between the company and its officers were even more tangled, Gassman noted.

As much as the consumer-electronics business is booming now, there are some risks for Luskin's and other regionally oriented specialty retailers, analysts note.

For one thing, Semmel says, "the industry is very sensitive to shifts in the economy. Therefore, a recession would have a short-term negative cyclical impact on consumer electronics growth and, depending on its severity," could hurt sales and profits.

Then, too, because the industry is so fragmented, there is room for a major retailer to come in and quickly establish a formidable nationwide rival, much as Carter Hawley Hale Stores Inc. set up Walden Books as a profitable nationwide chain. "I haven't seen anybody do it yet," said Gassman. "But I keep waiting for it." CAPTION: Picture 1, Inside a Luskin's store in Marlow Heights. The chain advertises its wares as "cheap, cheap, cheap." PHOTO BY LUCIAN PERKINGS -- THE WASHINGTON POST; Picture 2, Founded by Jack Luskin in 1948, Luskin's has grown to 29 stores with sales if $90 million in 1984.