The Rise of Snobby Secondhand Fashion Retail

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Don’t call them thrift stores. A new breed of secondhand fashion franchises is emerging, and it’s worlds away from the funky, dusty, cheap Goodwill.

Secondhand stores are not known for being picky. Rather, the typical Goodwill, Salvation Army, or Savers often serves as a dumping ground for American consumers eager to clean out their closets—in order to make room for more stuff, of course.

Yet a rising category of secondhand stores focusing on women’s fashion prides itself in being exceptionally picky. Minnesota-based Clothes Mentor, which has locations in 25 states and has at least nine new U.S. stores in the works, lists 15 or so higher-end brands that it specifically seeks out—Ann Taylor, Ugg, Nike, Coach, Fendi, Louis Vuitton—and stipulates that items should be “current to stores in the last 1-2 years.” Likewise, Style Encore, another secondhand franchise, with a handful of open stores and more than 25 “coming soon!” locations around the country, also typically accepts “items that have been in the retail stores within the past couple of years, are a current style, as well as in great condition.”

Meanwhile, Style Trader, a secondhand fashion seller with two locations in Michigan and ambitions to expand further, advises consumers to check the company’s Facebook page to see what items and brands it’s accepting lately.

In all cases, stores pay cash (or store credit) in exchange for items—which aren’t donations, as they are in the case of thrift nonprofits. That’s why Style Encore and the others get to be so picky.

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“They want high-end brands,” a South Dakota retail real estate broker said of Style Encore and its new location in Sioux Falls, according to the Argus Leader. “You take your gently used clothing and handbags in there, and they pay cash for them.”

But they don’t pay up for just any old thing. In fact, anything remotely old is turned down immediately. An Orlando Sentinel story about the rise of such secondhand stores in central Florida observed a Clothes Mentor manager turning down several items brought in by customers, including an Ann Taylor Loft tank top that “just doesn’t look as new as the other things.” Another customer came in loaded with clothes and walked up with just $10.80 after only three items were deemed worthy of purchase by the store.

The selectivity (and stinginess) of the business model allows these stores to offer customers upscale, nearly new, truly gently used clothing at prices far lower than the original retail location. The average price of goods at Clothes Mentor is reportedly $13. Customers who are selling and buying at these stores can also feel good about the environmental friendliness of the transactions, which constitute recycling after all.

Whereas these stores differ from thrift shops due to quality and consistency, they’re different from consignment stores in that they pay cash upfront for merchandise (rather than passing along a portion of the sale if and when an item is purchased) and the focus is almost exclusively on recent fashions, instead of anything antique or “vintage.”

Another interesting aspect to these stores is that they’re all offshoots of other successful secondhand operations. Winmark, the corporate parent of Style Encore, runs several other older secondhand retail brands, including Once Upon A Child, Play It Again Sports and Music Go Round, which sell kids’ goods, sporting goods, and music instruments, respectively. The Clothes Mentor concept was created by people who had been in the business of running Play It Again Sports and other franchises.

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Style Trader is the creation of Taylor Bond, a Michigan entrepreneur who acquired the kids’ clothing chain Children’s Orchard in 2004. According to Crain’s Detroit, after Children’s Orchard workers repeatedly heard customers ask if stores would begin selling fashions for teens and adults, the owners finally launched the new Style Trader brand in 2012.

The idea is that the same moms who shop for their kids at Childrens’ Orchard will be eager to shop for themselves at Style Trader. “Getting new customers is a lot of work,” said Bond. “You’re better off keeping the ones you’ve got.”