With the economy tanking and people concerned about the environment, recycled goods are hot. While eBay and Craigslist corner the used-stuff market in cyberspace, Winmark Corp. of Minneapolis turns kids’ castoff cribs, hockey skates, prom dresses, and half-size violins into half a billion dollars in cash at more than 850 locations around the country. Same-store sales rose double digits last year as the overall retail market collapsed. Focused squarely on those engaged in the expensive project of raising children, Winmark franchises four concepts: Once Upon a Child, Play It Again Sports, Music Go Round (instruments and gear) and Plato’s Closet (clothes and accessories for teens). Play It Again is the oldest and the cash cow; its 374 locations brought in $250 million last year, with Plato’s Closet and Once Upon a Child generating about $125 million each.
The resale store industry as a whole grew 5 percent last year, reports Adele Meyer, who heads the National Association of Resale and Thrift Shops. They run the gamut from Goodwill outlets to upscale charity shops turning over gently used designer fashions, and trendy chains like Buffalo Exchange, which posted $49.4 million in 2007 sales at 36 stores in urban centers and college towns.
Winmark seems to keep its franchise owners happy, reporting a 100 percent renewal rate and revenue of $31.2 million in 2007. A typical Plato’s Closet sells $600,000 annually, offering recent fashions from brands like Aeropostale and Old Navy at 70 to 80 percent off retail. Its inventory is a mix of new and used items, mostly sold by customers for 30 percent of resale value. A $100 pair of 7 for All Mankind Jeans might cost the store $6 and bring in $20. A proprietary computer program advises employees what to buy and how to price it, rejecting goods more than a year old or out of fashion.
While the core shopper is girls 14 to 24, the secondary customer is not their male peers but their bargain-hunting moms.
