The New Trend of Used Clothes

The New Trend of Used Clothes
Viki Stevenson stands behind the counter, passing fashion judgment. She’s wearing a gauzy black Viktor & Rolf blouse and skinny Diesel jeans as she sorts through a pile of clothes in the shop where she works in Brooklyn, N.Y. After rejecting a high-waisted, sequined pink skirt, she snaps up four G-Star narrow-cut cotton T shirts. “You gotta know your brands,” she says, as she tosses the keepers into a metal bin. Stevenson isn’t a buyer at an exclusive boutique. She’s a store manager who decides what items to accept for resale at a secondhand-clothing shop called Buffalo Exchange. It’s part of a growing chain of stores in a growing industry, and it just may be the cool place to find trendy fashions at a fair price this summer. These are not the musty, downmarket stores of yore. The best ones are as carefully curated as a Soho boutique; put a premium on current styles, not vintage novelties; and turn a healthy profit. The rise of fast fashion, which uses a speeded-up production cycle to rush designer-inspired clothes to moderately priced retailers like Zara and H&M, has breathed new life into secondhand stores like Buffalo Exchange by boosting their supply of barely worn apparel. “H&M is our bread and butter,” says Stevenson, 27, as she flips through a carousel of blouses from H&M, American Apparel, Benetton and the Gap with prices ranging from $7.50 to $14 apiece. Since more shoppers are loading up on cheap chic every few weeks instead of purchasing a few higher-priced basics once every few months, they’re less sentimental about quickly unloading them to help finance the next round. That means secondhand shops can sell for just $7 a month-old shirt that retailed for $21 at Charlotte Russe or Forever 21. By buying only what they know is already popular and paying sellers 35% to 50% of the price for which they plan to resell each item, the stores can virtually ensure a profit. Buffalo Exchange, which earned more than $3 million last year on $43 million in revenue, has 32 stores nationally, making it one of the largest purveyors of recycled clothing in the country. Three more stores are planned for this year. Crossroads Trading Co., based in Berkeley, Calif., rang up $20 million in sales last year at its 22 stores and also plans to add three stores. The number of resale shops is growing 5% annually, according to the National Association of Resale and Thrift Shops. There are no national estimates of the size of the used-clothing industry, since most of the country’s 20,000 resale shops are individually owned and many other sellers operate online. But Goodwill Industries, one of the largest players, sold $1.8 billion worth of donated goods–much of it used clothing–at its thrift shops in 2006. That’s a 67% increase from 2001. This quickening cycle of fashion lets secondhand stores be pickier than ever. Unlike nonprofits such as Goodwill and the Salvation Army, which accept most donations, the fast-fashion resale shops typically buy only about 5% of the apparel that people bring into the store. It can be a humbling experience for a novice seller, who may find herself leaving the shop with the same bag of castoffs that she walked in with. There are both art and science to the new generation of used-clothing stores. To keep their stock looking current, shops sneak some new clothes into the mix. At Buffalo, about 20% of the items for sale are new pieces–mostly shoes, jewelry and hosiery–purchased by headquarters and distributed to each outlet. “It gives our stores a more contemporary, avant-garde feel,” says Kerstin Block, the Swedish-born founder of Buffalo, who originally hoped to be a museum curator before opening her first store in Tucson, Ariz., in 1974. Since no store gets more than two or three of the same thing, buyers are none the wiser. At the Brooklyn store, the average selling price for any item is $16, with T shirts going for $11 and dresses for $18. At Plato’s Closet, which caters to teens, a computerized system in each outlet spits out prices for popular brands like Abercrombie & Fitch, Baby Phat and Seven. There’s even a guide to help workers determine the age of, say, a pair of shorts from the Gap on the basis of the styling of the label. Owned by the Minneapolis-based Winmark Corp., Plato’s has opened some 200 franchises since 1999. The company rang up more than $100 million in sales in 2006 and plans to open 35 additional stores this year. Winmark collects a 4% royalty fee from each store; a franchise costs $225,000 on average. The formula seems to work. Steve Johnson, who owns three stores in the Midwest, says he grosses $700,000 to $900,000 annually at each and nets 20%. Now it’s my turn to be judged on my fashion sense. By 5:30 p.m. on a Friday, the Buffalo Exchange store in Brooklyn is buzzing. After scouring the racks, I find my very own bargain: a short-sleeve, scoop-neck black shirt for $7.50. It probably retailed for $25 not three months ago. “That’s a good, basic summer shirt,” says Stevenson approvingly when I show her my purchase. I leave the store with a smile, pleased that my choice has passed muster with a pro. But for $7.50, it really doesn’t matter. At this price, there are no fashion victims. *

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