As recession lingers, well-heeled hit resale stores
By Marla Brill
(Reuters) - While many retail stores are working hard to lure holiday shoppers in the midst of bad economic times, a long-ignored corner of the market is on track to keep spirits high.
Used merchandise stores have emerged from the dusty fringes to become one of the fastest-growing segment of the retail industry. During the first nine months of this year, sales totaled $11.47 billion, representing a 26.7 percent increase over the same period last year, according to the latest Census Bureau data.
While non-profit outlets such as Goodwill and Salvation Army are the most familiar names in this space, privately-owned resale and consignment stores that sell higher-quality goods and cater to a more upscale clientele represent the fastest-growing segment of the resale market, says C. Britt Beemer, Chairman of America's Research Group, a consumer research organization.
A few years ago only about 6 percent to 8 percent of people frequented such stores at least once during the year, he says.
That number has almost doubled.
"Many middle-class consumers may be doing some belt tightening, but they still want quality," says Beemer. "Instead of going to the mall to buy a $300 designer party dress that might come out of the closet wear twice a year, a shopper might buy it at a consignment store for $50 or $60."
Ken Alterman, chief executive officer at Savers, the country's largest for-profit resale chain with 287 stores, says the company's ability to set up shop in more prosperous neighborhoods it once couldn't afford to enter is a major contributor to the recent rise in income and education levels of its customers.
"A lot of locations we've moved into were left empty by failed businesses, and we've gotten some very attractive leasing deals from landlords who need to fill the space," he says. "Their loss has been our gain." Continued...