Resale shops see surge in shoppers as budgets for clothes shrink

Sue McTague thrives on finding a good deal.

In the past, McTague of Palatine shopped at garage sales while her daughter frequented Plato's Closet, a popular resale shop for teens. "My daughter found 10 or 11 name brand shirts, like Hollister and Abercrombie, for $60," McTague said.

Then McTague found a pair of like-new Tommy Hilfiger jeans for $16 in a resale shop. Now, she's hooked on Clothes Mentor, a new and growing franchise for women featuring upscale clothing at locations in Schaumburg and Naperville.

"There's so much stuff at this store, you need at least an hour to look around," said McTague who visited the Schaumburg shop on two consecutive days last week.

Savvy shoppers like McTague are looking to resale stores as a way to make their dollar go further as prices for food and fuel continue to soar.

Shoppers are tightening their spending and resale shopping is increasing, said Adele Meyer, executive director of the National Association of Resale and Thrift Shops.

"During hard times, the used clothing stores are going to benefit," agreed George Rosenbaum, analyst of Chicago-based retail research firm Leo J. Shapiro and Associates Inc.

A resale store provides shoppers the opportunity to buy outfits they may have avoided at full price. During tough times, "apparel generally is hard hit because reality is, most Americans have enough clothes in their closets," Rosenbaum said. Among retailers, the clothing sector saw the biggest sales decline in May in reports released Thursday.

This economizing is what's driving the resale market.

About 80 percent of resale store owners who responded to recent survey reported an increase in new customers. Three-quarters of the respondents said sales increased an average of 30 percent in April over last year.

At the same time, the face of resale is changing, challenging stereotypes of the stores as dark and cluttered. Today's resale stores are bright, with merchandise displayed in an organized manner. Thrift shops, run by nonprofit organizations, and consignment stores make up a multibillion-dollar industry, growing by 5 percent each year, according to the resale association.

Janice Smith is in the process of starting an upscale children's resale store in Wauconda. She's basing it on her needs raising four children under the age of five.

"The economy is terrible. I like to dress my children nicely, but it's getting hard to afford to do that," she said.

Finding that growing children rarely wear out their clothes, she launched Posh Tots Resale set to open this fall. As part of the business plan, she holds huge seasonal sales at a larger venue.

The first sale took place last month in Libertyville drawing about 300 shoppers. Approximately 50 people sold their name-brand children's clothing, toys, books and high chairs.

Smith's business is taking an innovative approach to make it easier to track and price merchandise. Smith utilizes an online tagging system run through her Web site at www.poshtotsresale.com. The site also gives tips on everything from pricing to removing stains from clothing.

Smith is finding that the image of resale has changed. "People are losing the stigma. It's not your mother's garage sale anymore," she said.

Retail analysts agree. "Resale stores have been in an evolution," Rosenbaum said.

In the past, nearly all resale stores were run by volunteers and charities such as the Salvation Army. This has evolved as entrepreneurs have moved in to take on the growing retail segment.

These owners have added beneficial characteristics to resale that have helped make it more successful.

For example, the racks are filled with clean, often upscale, clothes that are in style.

Obtaining quality merchandise and pricing it correctly is vital.

Elaine Krieger, who owns nine resale stores, must inspect and price each item that's offered. She pays cash on the spot for acceptable clothing.

The Naperville mom started opening franchises catering to children - Once Upon a Child - and teens - Plato's Closet.

A couple of years ago she expanded to women, launching Clothes Mentor in Naperville. She expanded to Schaumburg this spring and will open another store in July in Orland Park.

About 20 percent of Clothes Mentor is designer purses. "The purses here are a really good deal," said Virginia Sabbak of Barrington while checking out the Schaumburg store for the first time last week.

"It's just so expensive at the department stores," she said.

Knockoff purses are not allowed. Coach, Jones of New York and Kate Spade handbags are included in the mix.

Krieger also believes the economy is giving her business a push.

"With the economy and the gas and recession - it really makes resale all the more attractive," she said. "They consider resale a recession-proof business."

Kim Mikus covers retail. She welcomes comments at (847) 427-4567 or kmikus@dailyherald.com.