Ally Peet recently hauled a garbage bag full of clothing to a resale store called Plato's Closet in Orem, Utah, hoping to get some extra money from the chain that pays cash for used apparel and accessories.
Selective Buying
The 21-year-old Brigham Young University college student watched a sales clerk sift through the items, including an ultra-trendy Dior T-shirt and a Juicy Couture hooded sweatshirt. Then, the buyer rejected them, thinking the high-end labels would turn off low-budget shoppers.
"Even the really, really great stuff that's in really great condition, they didn't even accept it," Ms. Peet says. "They said [the brands] wouldn't sell well here."
In the latest wrinkle in discount shopping, resale clothing stores—places that are super hot among teens and twentysomethings on a tight budget—are getting picky. The growing number of people looking to cash in on their closets means the stores can be more selective about the brands they take and the condition of the items.
These aren't traditional thrift stores, which rely on merchandise donations, or consignment shops, which pay a seller only when an item finds a buyer. Instead, resale shops pay cash for used clothing, giving the seller typically between 30% and 45% of what the item will be priced on the rack. Many offer a greater percentage, upwards of 50%, if the seller takes the payment in the form of a store credit.
Plato's Closet, with 261 franchisees, is one of the largest teen-centric resale chains that purchase clothing on the spot. It's owned by Winmark Corp., a franchise operator with royalties last year of $21.8 million, up slightly over 2007. (Royalties are a percentage of gross sales paid to Winmark by franchisees.) The company attributes gains, in part, to "higher franchisee retail sales" at Plato's Closet and Once Upon A Child, its children's concept.
Buffalo Exchange Ltd. is another clothing reseller, with 39 locations. The company has increased revenue to $56.3 million last year from $40.4 million in 2005. There are smaller chains, such as Crossroads Trading Co., with 24 outlets, primarily in the West, as well as independent shops scattered throughout urban areas and college towns, where cash-strapped youth abound.
Shoppers flock to these destinations because of the low-priced clothing, but also because the green theme—recycled clothing—resonates with them. Many sellers—young and old— flock to them, too, because they need the money more than the clothes. Others are on a quest to simplify, the result of buyers' remorse after a years-long shopping binge.
"People are bringing in a lot more stuff, like huge amounts of stuff," says Kerstin Block, the president of Buffalo Exchange. What used to be one bag of merchandise is now seven or more, Ms. Block says. "They bring everything from used socks to fancy Fendi designer purses."
Indeed, the National Association of Resale and Thrift Shops says more than three-quarters of its members reported in an October survey that sales were up from a year earlier. The number of sellers to resale shops, and the amount of goods sold per seller, have also increased, the association says.
Still, not everything that's brought in will make the cut. The refusals sting—and not just because the person doesn't get the money he or she wants.
"I associate my clothes with my personality," says Indiana Adams, a 30-year-old Austin-based actress who has had mixed success selling clothes to resale shops. "If they don't buy my clothes, they don't like my clothes—and they don't like me."
Even if a shop wants to buy an item, some sellers are insulted by the price. Moya Luckett, a film professor at New York University, took a $400 pair of unworn, half-size-too-small Sigerson Morrison shoes last fall to a trendy, independent resale shop in Brooklyn. She got less than $10. "It basically made me resolve I wouldn't be selling to them again," she says, adding she opted against store credit because the place "looked like it had bedbugs."
If the price isn't right, you can refuse—something Andie Savoie, of Metairie, La., realized too late. The administrative assistant with a penchant for buying the same item in multiple colors sold six items to Plato's Closet in September for a total of $19.95. She took the money at the time but had second thoughts on her drive home. "I'm like, 'Wait a minute, half that stuff had tags on it,' " Ms. Savoie, 32 years old, says. "They gave me $1.50 for something I paid $20."
Clearly, things can get emotional. At the Buffalo Exchange in Las Vegas, tears at the selling counter have become commonplace, says Nicole Wentworth, an associate manager who has to comfort sellers parting with sentimental items or pleading for higher prices.
The desperate reasons for wanting to sell goods run the gamut from a lost job or a sick family member to a hungry child. More than once, someone has sold something in order to post bail for a friend.
Ms. Wentworth once had a woman threaten to kill her if she didn't buy all of her things. "Are you serious ma'am?" Ms. Wentworth says she responded. "It's just clothing."
Resale-shop employees say they select merchandise based on what they think they will be able to re-sell. They also take into consideration the age range and styles of their customer base. It's admittedly subjective, but there are a few tips that can leave both sides happy.
For starters, research a store before trying to sell items there. Scan the racks to get a sense of the merchandise and ask for a list of desirable brands. Chains that cater to teens, like Plato's Closet, put a premium on inexpensive labels, such as Forever 21 or H&M, that they sell at an even lower price. Other shops, like Threads in St. Cloud, Minn., take higher-end brands, like Marc Jacobs or Theory. Premium-denim labels, including 7 for all Mankind or True Religion, are in demand at most places.
The label on the item is important, but style trumps all. Bring in items that are trendy now. "If you know you're not going to wear it, try to sell it right away," says Fabian Lam, the associate manager at one Buffalo Exchange in San Francisco. "Don't wait two years when it's not in style any more."
It also helps to sell clothing that matches the time of year. "Clothing has to be in season," says Hanna Alkaf, a 24-year-old copywriter in Chicago who has successfully sold clothes to several local resale shops. Sweaters, not shorts, are in demand now. If you've got a great spring dress, hold on to it until February.
Also, put your clothes through the wash cycle before they hit the selling table. "Make sure it's freshly laundered," says Rene Tirado, the co-owner of four Plato's Closet locations in Florida.
It also helps to press or neatly fold the clothing, says Carrie Hosmer, manager of the Purple Cow, a children's and maternity clothing resale shop in St. Louis, Mo. "Wadded in a ball in a garbage bag—not a good way to bring things in," she says. Ms. Hosmer reiterates that the decision to buy is not a personal one. "It's never like we don't like your clothes or we don't like you," she says.
Write to Elizabeth Holmes at elizabeth.holmes@wsj.com
This article is from Are Your Old Clothes Good Enough?
Wednesday, December 2, 2009
Apparel + Shoes + Accessories: Plato's Closet in Orem, Utah
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