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Thrift Shops Thrive Amid Recession

A survey of secondhand thrift shops found sales were up an average of 30 percent in more than 71 percent of the stores.

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Thrift shop nation? Not quite, but secondhand shops are thriving in an era when frugality and savings have renewed traction for Americans.

As retail sectors from mass to luxury struggle to navigate the evolving consumer mind-set during the recession, the National Association of Resale and Thrift Shops, which represents more than 1,000 thrift, resale and consignment shop members nationwide, said a survey by the organization showed fourth-quarter 2008 sales were up an average of 30 percent in more than 71 percent of the stores.

“Much of the reason that resale is so appealing during a recession is because the type of merchandise, and the level of quality you can find, is completely across the board,” said Adele R. Meyer, executive director of the group. “That’s the way this industry as a whole works.”

And more customers are migrating from the high end, including professionals and people who are trying to change careers.

There is a flip side to the increased level of activity, thrift retailers said. Higher unemployment, work furloughs, tightened spending and other recession-related cutbacks mean that donations are falling.

That’s especially the case “with larger-ticket items, such as furniture and electronics,” said Melissa Temme, a spokeswoman for the Salvation Army.

The thrift shop industry is threefold: Customers can find deals on items from apparel and housewares, those who donate used items can take tax write-offs and portions of revenues from donations go toward each organization’s charitable cause (remaining revenues are used for overhead expenses). For example, at the Salvation Army, money goes to the organization’s adult rehabilitation centers; at Goodwill Industries, job training programs, and Housing Works, toward programs for people with AIDS and low-income families.

Consignment shops, which also offer secondhand merchandise, operate differently. Individuals who donate are seeking money from the sale of their items, and when merchandise is purchased, the original owner shares a percentage of the sale price with the store.

Consumers are buying mainly clothing, shoes and housewares, retailers said.

Goodwill Industries International, which operates more than 2,200 retail stores in North America, recorded a 7.2 percent increase in same-store sales in February 2009 compared with the same month in 2008, said Lauren Lawson, a Goodwill spokeswoman. Goodwill’s Colorado Springs regional stores, for example, reported that, in February, the overall customer count was up 13.4 percent and sales were 14.3 percent higher compared with the same period last year.

To keep up with growing demand, New York-based Housing Works Thrift Shops, which operates eight locations in the metropolitan area, launched a location in Manhattan’s TriBeCa in February. It will also open a SoHo store on Saturday, located near designer boutiques such as Tory Burch, Marc Jacobs, Derek Lam and the new Topshop store.

“We’re feeling optimistic about being aggressive in our expansion efforts,” said Housing Works president Richard Vorisek. “But because business is good — and we’re maintaining sales — we’re going through more merchandise more quickly. We need more donations. Those are down about 10 percent. People aren’t getting rid of their old stuff as quickly, because they aren’t purchasing firsthand items as quickly as they used to.”

Housing Works sells designer brands such as Marc Jacobs, Marc by Marc Jacobs, Gucci, Ralph Lauren, Prada, Diane von Furstenberg and DKNY.

“We have a loyal base of customers,” Vorisek said. “We think of ourselves as a fashion destination, a brand with a specialty store approach. And because of our prices, our foot traffic is increasing. We’re seeing new faces, in addition to our loyal customers. We’re a great avenue for someone who left banking and now is heading into fashion. Recent college graduates and young professionals are hitting our stores now.

“The new workforce is seeing secondhand as a way to get some interview outfits together,” he said. “They can buy a tie for $20 at our store.…We’re seeing an influx that was not there before.”

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