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KAI RYSSDAL: The retail industry seems to be a lot like housing the past couple of months. One day you get a report that says it’s in the dumps. The next you get some number that doesn’t seem so bad. But whatever the statistics do say, the retail mood out there is generally grim for most mainstream stores. But stores that rely on donated goods are doing pretty well. All those commercial real-estate vacancies? They’re the perfect opportunity for thrift shops to broaden their horizons.
Gigi Douban reports now from from Birmingham, Ala.
Gigi Douban: Thirty-year-old Stacy Peavy had never shopped in a thrift store. But when she walked into one in Gardendale, Ala., to her surprise, the place smelled great.
Stacy Peavy: It was clean, it was organized. You know, for a thrift store, I thought that was a plus.
Peavy was at the newest location of a chain called America’s Thrift Stores. Her shopping cart was loaded with about a half-dozen brand name suits.
Peavy: This is a $145 suit. Great condition. You see what I’m saying? $9.88, you believe that?
Peavy needs the suits for her job at the Social Security office. But she doesn’t have lots of money to throw around. Her husband recently was laid off from the U.S. Postal Service and the couple have a teenage daughter.
Like so many others, Peavy, was thrust into thrift shopping by the recession. Now there’s another market thrift store owners are courting — people with a little more spendable income. The strategy? Follow the money.
Timothy Alvis: See we try to locate our stores in affluent areas.
That’s Timothy Alvis, president of America’s Thrift Stores. It’s a for-profit chain with 14 stores across the southeast. Most of the store’s inventory is donated, and the thrift chain gives half its profit to charity.
It’s important to note that when Alvis says “affluent”, he means people with a little extra money to spend — people who spend $3 on a shirt, not because they have no choice, but because it’s a bargain. Problem is, real estate agents haven’t always welcomed thrift stores into higher-income neighborhoods.
Alvis: You’re wanting to grow and you’re out there looking and people says “Bah, thrift store. Pfft. Go back down to that side of town.”
Now, commercial developers are less selective about their tenants.
Alvis: Right now, of course, there’s a lot of retail spaces available. So they’re like anybody else. They’d rather have somebody paying rent than nobody.
That’s how the company got its foot in the door this summer in Gardendale, a booming suburb of Birmingham, Ala., where the median household income is about $56,000. It’s opening another store in the college town Athens, Ga. Alvis says it’s not that they want to exclude poor customers…
Alvis: But those people will come to an affluent area and shop in the thrift store, where people in an affluent area will not go down into a poor part of town and shop.
The trick, Alvis says, is getting people in the door.
Alvis: We’ve even considered changing our name, taking the “thrift store” out of it.
Wendy Liebmann is CEO of WSL Strategic Retail, a marketing consulting firm. She says two factors are working in thrift stores’ favor: the recession and the green movement.
Wendy Liebmann: Real-estate developers are recognizing a desperate need, but also that again, this isn’t sort of cheap and nasty anymore. This does have a certain contemporary, modern feel to it, whether it’s value or good for the environment.
The National Association of Resale and Thrift Shops, a trade group that monitors the industry, says new shops are opening throughout the U.S. at a faster rate than pre-recession. And 67 percent of stores it surveyed said sales today are up a third over last year.
Liebmann: This recession, because it’s been so cataclysmic, it’s exposed more people to the thrift shop that perhaps hadn’t even thought about it before.
But Liebmann offers this bit of advice: don’t get too fancy. She says if thrift stores lose too much of that musty aroma, consumers might just start to think the bargains aren’t all that amazing after all.
In Birmingham, I’m Gigi Douban for Marketplace.