Secondhand Stores Are Profiting From The Recession
CNNMoney:
On a Wednesday afternoon in late December, the average wait to sell clothing at Buffalo Exchange, a Manhattan consignment shop, was about 25 minutes. Beyond the front counter, where the consignors sought pocket cash and tax deductions, nearly a dozen shoppers squeezed themselves between overstuffed racks in the 450-square-foot space, seeking bargains amid used designer jeans and last season’s cashmere sweaters.
“You should see this place on weekends,” said the store’s assistant manager. “The lines get to be at least 10 people deep.”
The month-old shop, which already possesses the slight musty smell typical to thrift stores, is the first Manhattan location for Buffalo, a Tucson-based secondhand-clothes retail chain with 34 stores across the nation. The new store’s crowds are indicative of both Buffalo Exchange’s continuing success – the privately held company says it has $50 million in annual revenue and is concluding its third consecutive year of sales growth – and also of the resale market’s overall performance. Secondhand shops are a bright spot in today’s downtrodden retail industry.
“We do real well in economic downturns,” said Kerstin Block, 66, who founded Buffalo 34 years ago with her husband. “I think that people are more willing to sell their clothes when the economy’s bad, and they’re more likely to shop in used-goods stores. It’s less expensive.”
In what’s supposed to be the busiest time of year for department stores and retailers, the National Retail Federation reports that clothing stores’ sales are down more than 7% over the previous year. ShopperTrak, a research firm that charts foot traffic at the nation’s malls, says that holiday crowds are down by about 10% since last year and that overall sales this season will only increase by about 0.1%.
“People can’t afford to buy as much these days at the regular retail channels,” said Jeff Van Sinderen, a senior retail analyst at B. Riley, a Los Angeles research and investment firm. “Consumers are looking for extreme values.” Read more.
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