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Thrift shops thrive amid economic downturn

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ALAN SCHER ZAGIER | October 7, 2008 07:02 AM EST | AP


COLUMBIA, Mo. — Forget about the outdated notion of thrift shops as the refuge of the working poor, the down and out or the vintage fashion hipster. In these troubled times, the powerful lure of a secondhand retail bargain is attracting a whole new breed of customer.

The Salvation Army and Goodwill Industries International, the nation's two largest charitable resale organizations, report year-to-date sales increases of 6 percent to 15 percent.

The gains are even more pronounced in the private sector. In an industry trade group survey of more than 200 resale and thrift shops, nearly two-thirds of those businesses reported higher sales in 2008 compared to the previous year. The average sales increase: 35 percent.

Consumers "can't change the price of gas. They can't change the price of food. They can't make the stock market go up again," said Adele Meyer, executive director of the National Association of Resale & Thrift Shops. "But they can control the price of clothes and furniture by being a savvy shopper."

The Salvation Army store in Dublin, Ga., located halfway between Atlanta and Savannah, has seen its sales increase by 50 percent this year, said store operator Gary Spivey. The comparative affluence of his new customers is obvious.

"We're seeing a lot more middle-class and upper-class customers we haven't seen before," he said. "Without even asking, you can just look in the parking lot (at their cars)."

Savers Inc., a for-profit thrift store chain based in Bellevue, Wash., has had a 10 percent growth rate, said chief executive officer Ken Alterman. The company now has 220 Savers and Value Village stores in the United States, Canada and Australia, and expects to open 25 new stores in each of the next several years.

According to Alterman, 75 percent of the company's customers are college educated, with an average income between $50,000 and $65,000. Thirty percent of its customers have household incomes exceeding $100,000, he said.

Some of the chain's most successful stores are in Redmond, Wash., home to Microsoft; the high-end waterfront in Victoria, British Columbia; and the Hawaiian island of Oahu.

"We're in these beautiful neighborhoods, and the stores just thrive," Alterman said. "We hold up well in this economy."

Widespread economic turmoil and personal financial struggles aren't the only factors driving the increased interest in resale retail, experts say. A growing "green" ethos among American consumers has also propelled the industry.

"People are really savvy now," said Angie Heidenreich, owner of LuLu's Consignment Boutique in Fletcher, N.C. "With consignment you make money, you save money and you recycle. It's a no-brainer."

Heidenreich opened her consignment store _ which essentially serves as a middleman for customers who want to buy and sell clothes _ in November, 2006. Sales increases of nearly 100 percent forced her to more than triple the store's size to keep up with demand.

"We're getting more people in who probably wouldn't have stepped in the door," she said. "It's more acceptable now than it was in the past. The image of thrift stores were kind of grungy, dingy places. Now some of them are like boutiques."

In the Missouri college town of Columbia, both Goodwill and The Salvation Army report recent sales increases of roughly 25 percent.

April Hayes, a 28-year-old legal secretary, has shopped at the Columbia Goodwill store for six months at the urging of her mother and sister. During a recent weekday lunch break, she combed the store's racks in search of business attire.

"I've gotten addicted," she said. "You can pay $2 or $3 for the same thing that would cost you $400 at the mall."

The surge in thrift store sales has its downside, though. The Salvation Army reports a dangerous decline in donations. Just as consumers are now more likely to buy secondhand goods, they are also less likely to get rid of their used clothing or furniture.

"We rely heavily on consumer culture," said spokeswoman Melissa Temme. "People are finding that the couch can last a little longer. The suit, while it may not be perfect for this year's fashion, is fine."

Money earned at its thrift stores helps fund the agency's adult rehabilitation program. So while administrators are thrilled at the growing revenue, they also fear an inventory shortage.

"At some point it's going to come to a head," Temme said. "If donations continue to stay down, we're going to lack items to sell."

As a result, The Salvation Army is rolling out a national ad campaign in January _ the first in its 128-year history in this country.

New customers aside, thrift shops continue to attract a devoted cadre of bargain-hunters. Now that more traditional shoppers have been exposed to the secondhand market, its boosters don't expect that renewed interest to taper off anytime soon.

"People always love a bargain," Meyer said. "Nowadays, it's just more necessary."