Five years ago, Kelly Newell quit her job as corporate membership director for the YMCA of Greater Omaha, took out a small business loan and a second mortgage, and opened the kind of store where she wanted to shop.
She stocked her new store with secondhand dresses, tops, skirts, denim and accessories from classic, midpriced chains — Anthropologie, J. Crew, Banana Republic — as well as cheaper, trendier stores like Urban Outfitters and American Apparel. She also offered to buy used clothing that was still fashionable and in good shape, in exchange for cash or store credit.
Half a decade later, Scout Dry Goods, 5019 Underwood Ave., in Dundee, is thriving.
Newell now employs six people, and her Sunday dollar sales (more on that in a bit) draw crowds. She has enough loyal customers that the stock is ever-changing, with new items arriving daily.
“It’s kind of taken on a life of its own,” said Newell, who celebrated Scout’s fifth anniversary last week.
The store gets merchandise from customers — mostly young women, though Scout sells some men’s things, too — who haul in garbage bags and laundry baskets of things that don’t fit, that they’re tired of or that they hardly ever wore. Customers browse as one of the store employees sorts through their things and determines what will sell. Then the buyer offers the seller cash — on the spot, which differentiates Scout and other resale stores from traditional consignment stores, which typically pay higher prices for used clothing, but not until it sells — or offers only store credit for the things they’re able to take.
The model has worked well for Newell, 33, but it’s not new or even particularly unique. One of the first resale chains, the Buffalo Exchange, opened its first store in Tucson, Ariz., in 1974 (Newell shopped at Buffalo Exchanges in Colorado when she was in college.) Plato’s Closet, Wasteland (in California) and other resale chains followed, and many independent stores employ the same resale strategy. In Lincoln, the locally owned Black Market opened a few years before Scout, selling a combination of gently used name-brand clothing, vintage pieces and locally made clothing.
But, like Scout, the shops are growing more popular. The multiple-outlet Plato’s Closet chain, for example, had its best year ever in 2012, a spokesman said.
Newell didn’t know it at the time, but January of 2008 was a particularly good time to open a resale clothing store.
The country was entering a recession, and consumers were hanging onto their money a bit tighter, she said. For some, spending $40 on a top or $70 on a pair of jeans didn’t feel as easy to justify as it had a year before.
At the same time, she said, the green revolution was gaining ground. Consumers liked the idea of giving used clothing new life, and of lessening their carbon footprints by staying away from things that were brand new or cheaply made. Newell, who is earth-conscious herself, used second-hand fixtures and leftover paint for the store. Most of the decorations on the walls — which change seasonally — come from second-hand or antique stores. Recycling is “kind of in the guts of the store,” she said.
And with the rise of social media, Newell said, more women were posting daily photographs of their outfits online, or drawing inspiration from fashion bloggers.
In short, she said, more women wanted to have their own distinct style.
In response, Newell added vintage clothing (and started collecting some herself), as well as accessories made by local artists and a few new pieces, including a rack of vintage-inspired chiffon party dresses, which are available exclusively at Scout.
A desire to look unique is one of the reasons 21-year-old Hope Jewell, a longtime customer, frequents the resale store.
“I love fashion,” she said. “I love that Scout has clothes that are from seasons past because it’s not stuff that you see at Gap or Banana Republic or at the mall.”
Jewell said she tends to wear mostly simple clothes — solid colors, cotton tops, jeans. But she likes to mix in an eclectic piece — say a chunky necklace or a pile of mismatched bracelets — to give her outfits some oomph.
She also enjoys the thrill of the hunt. She once found a pair of Kimchi Blue ballet flats with a little ankle strap she’d been seeking online for months. They were $10.
It’s like thrifting, she said, only someone else has already weeded out the stuff that is outdated, stained, pilled or otherwise unwearable.
“It’s only going to be the good stuff, so it’s a matter of sorting through it and finding the stuff that’s my style,” Jewell said.
Lysa Tan, manager of the Omaha location of Plato’s Closet, said some of the merchandise Plato’s Closet buys is stuff originally purchased online or perhaps on vacation, giving the store a small stock of stuff from retailers that don’t have a physical presence in Omaha. Clothing from trendy, fast-fashion chains like H&M and Topshop tend to sell particularly quickly, she said. Plato’s Closet, which opened in Omaha in 2003, also offers customers store credit or cash — on the spot — for items they deem resellable, though its customers tend to skew a bit younger than Scout’s.
Brands from the Buckle — Daytrip and Big Star, for example — and from stores like Wet Seal and Forever 21 are popular with the store’s tween, teenage and early 20s clientele.
At Plato’s Closet, though, the main draw is the price, Tan said. Many of the top-selling items aren’t one-of-a-kind or vintage pieces, but rather trendy garments, less than a year and a half old, probably from the mall.
“Here I can find a brand new, perfect Free People dress for probably like $40,” said Tan (the midpriced, Bohemian-inspired brand is one of her favorites). Prior to working in resale, she shopped mostly online, she said. Now, she’s a resale addict.
She’s far from alone.
Plato’s Closet has around 375 U.S. locations, said Steve Murphy, president of franchising for Plato’s Closet parent company Winmark Corp., and he expects another 34 to 37 stores to open in 2013. The chain has seen double-digit sales increases each year beginning even before the recession, he said.
Murphy, like Newell, credits some of the resale market’s growth to the economic slowdown, and some to the emphasis on recycling, which even tween customers often appreciate, he said. The layout of the stores — which resemble boutiques more closely than thrift stores — doesn’t hurt either.
Customers appreciate that, he said: “They’re not expecting to walk in and see a retailer that looks like an Abercrombie.”
Tan, who has worked in resale for about two years, said she’s noticed more and more resale converts during her time in the business.
“It’s definitely getting a lot more hype.”
That’s also true at Scout, where customers bring in far more clothing than the company can accommodate. This allows Newell to be selective. It also has given birth to one of Scout’s most popular events.
When the store’s buyers reject clothing as too old or worn, customers often leave it rather than taking it back home or donating it to a thrift store. Newell stockpiles these things, then sells them during the Scout’s Sunday dollar sales, which draw dozens of customers — usually including Jewell — each week.
“It’s fun to dive in and see what you’re going to find,” Jewell said. “It’s always a surprise.”
Two summers ago, Newell converted a small camper into a mobile store she calls Li’l Scoutie, which makes the rounds at outdoor events and festivals and gives the store a few hundred extra square feet of retail space. And she plans to open a second location, though she hasn’t yet determined exactly when or where.
Five years after Scout first opened, consumers are still price-conscious, she said. They’re still worried about the environment, and now they’re more worried about supporting local businesses, too. And they’re still glad to make a few dollars off of clothing that would otherwise sit unworn in their closets, Newell said.
“The stuff walks in to you,” she said.
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