PRINT THIS STORY:

CHANGE TEXT SIZE:

DRESS FOR LESS

Plato’s Closet offers secondhand clothes to teens with limited means

BY DEBRA HAZEL

Problem No. 1: Teen-agers love new clothes, all the time. Problem No. 2: Teen-agers can’t afford all the new clothes they want.

One solution: Plato’s Closet, a chain of 115 stores that resells “gently used” apparel as well as accessories and housewares at drastically reduced prices — usually to the same teens who bring in their own clothes to recycle. In March Abercrombie shorts that went for $44 new were selling for $12 at the Plato’s in Paramus, N.J.

“The prices are right, and they have a really big selection,” said Carolyn Mellick, 17, a first-time visitor to the Paramus store.

That’s music to store owner Steven Schechter’s ears. And what’s more, it’s not just teen-agers who are trying to save a buck. “We find we get as many young and older adults as teen-agers,” Schechter said. “We get all ages in here.”

Schechter, a former computer systems manager, attended one of the weekly “discovery day” sessions the chain sponsors for potential franchisees, at its headquarters in the Minneapolis suburb of Minnetonka, and liked what he heard. He opened his 2,700-square-foot franchise in September.

Lynne and Dennis Blum, the parents of three teen-agers, founded Plato’s Closet in Columbus, Ohio, in 1997. Their kids were “buying them out of house and home,” said Richard Brill, a spokesman for Winmark Corp., which bought the franchise rights from the Blums in 1999. “They said there had to be a better way.’’ One of the Blum children came up with the store name because he happened to be studying Plato at the time.

That first store grew into four, which the family still owns today. Winmark (formerly Grow Biz International), has considerable experience in the secondhand merchandise business. The company operates other resale chains, including Play It Again Sports (sports equipment), Once Upon A Child (children’s clothing, furniture and accessories) and Music-Go-Round (musical instruments).

The Plato’s business pattern is simple: The customer brings in used, branded apparel, and a clerk assesses its condition and sorts it by brand and type. The clerk then enters that information into a proprietary computer system that generates a monetary offer. If the offer is acceptable, the customer can choose to receive cash or exchange the apparel for store merchandise.

“Many customers come in the store to sell things, then they look around and spend some, most or all of the money on things to buy,” Brill said.

Only 2 percent of the merchandise is new, and sizes range from girls’ 12 to juniors’ 15. The stores do carry some men’s clothing, but the male patronage is minuscule.

“We stock as much [menswear] as we can get,” Schechter said. “But men tend to wear their clothes longer and tend not to take as good care of them.”

Brands include Abercrombie & Fitch, American Eagle, Bebe, Express, Tommy Hilfiger and Sean Jean, but these vary by market.

Their parents are smiling too — clothing them in the latest fashions no longer means breaking the bank.

“[Plato’s Closet] provided a way to serve the Once Upon A Child customer base as they grew into teen-agers,” said Becky Geyer, a vice president of franchise management for Winmark. “It would attract many teens and 20-somethings by offering trendy, name-brand clothing at very low prices. Winmark also recognized the size and spending power of Generation Y. Finally, Winmark felt that many Once Upon A Child franchise owners would migrate to the new Plato’s Closet concept and open companion stores.”

Since then, the company has expanded to 115 Plato’s units in 25 U.S. states. It plans to open an additional 30 stores or so by year-end. Winmark’s goal is to open Plato’s Closets in all 50 states and north of the border over the next 10 to 12 years, mimicking its expansion of Play It Again Sports in the United States and Canada, Geyer says.

The stores, which average between 2,500 and 3,200 square feet, are typically located in community or power centers near regional malls. Schechter’s store, for example, operates less than a mile from Westfield Shoppingtown Garden State Plaza, one of New Jersey’s largest centers.

Though Winmark has one corporate store at its headquarters, used largely for training, all the others are franchised. Franchise start-up costs run from about $130,000 to roughly $245,000. Franchisees also pay a royalty fee of 4 percent of gross sales plus a $500 annual advertising production fee.

In return, they receive training and help with business plan development, site selection and store setup. Other benefits include the use of an inventory-tracking system; a toll-free support number; marketing and advertising resources, including television commercials, direct mail and print ads; consultation sessions; and annual conferences.

“Winmark provided superb training, including two separate weeks in Minneapolis,” said Schechter.

Plato’s and its sister chains have streamlined an old and established retail concept. There are more than 20,000 secondhand stores nationwide, according to the National Association of Resale and Thrift Shops, St. Clair Shores, Mich.

“Resale stores is an old industry, a descendant of the bartering that took place during prehistory,” said Adele Meyer, the association’s executive director. “As of 1997, the last time it was measured, the industry was estimated at $11 billion.” That represents a doubling over the previous 10 years, she points out.

“It hooks you — people love to save money,” Meyer said. “They want quality and value for their dollars.”

And that won’t change even as the economy improves, some say.

“I don’t think it’s just a down-market [phenomenon],” said Cynthia Cohen, president of Miami-based retail consulting firm Strategic Mindshare. “There are people who just love the hunt, no matter what the economy. I wouldn’t say that I’ve found a lot of teen-agers who love the hunt; it’s more their parents.”

Advertising is key to reaching those customers, says Schechter, explaining that even his daughter needed some persuading. (He uses cable television and some print to promote his store.)

“She said she would never shop here,” he recalls. “Now she shops here all the time.”

© 2008 ICSC. All rights reserved. | Terms and Conditions | Privacy Policy | Contact ICSC | ICSC Home |