Resale shops remake empty retail spaces as consumers reshape buying habits

By Sandra M. Jones, Tribune reporter

Part 3

A second drop-off shop opened last month on State Street in the Gold Coast, and McFadden has her sights

on expanding beyond Chicago next year.

"Anybody is happy to get rid of something for money, no matter what their income level," said McFadden,

who writes a fashion blog for Chicago Now, which is owned by the Chicago Tribune.

Savers, the West Coast resale chain, has been watching the demographic of its customers change in recent

years. About 70 percent of its customers have some college education, compared with 50 percent before the

recession, the company said. Likewise, the average annual income has risen to the $45,000-to-$65,000

range, from $35,000 to $45,000 before the recession.

As they attract new customers, the chain is opening new stores at a rate of about 20 a year. Savers expects

to add three to four stores a year in the Chicago region for the next five years, said Kenneth Alterman,

president and CEO of the closely held company.

The 57-year-old firm plans to open its Chicago-area store on April 14 in Downers Grove, taking over a

shuttered Circuit City. A second Savers is slated to open in May in Naperville in a former Linens 'N Things.

Both chains went out of business during the financial crisis.

"We've seen our largest customer conversion and transactional gains in our history in the last three or four

years," Alterman said. "What has happened is so many more people have been exposed to our type of

retail."

Last year, Savers sold $680 million of secondhand clothing, books and other goods. In March, the company

expanded further when it acquired Minneapolis-based Unique Thrift LLC, adding 18 stores in six states.

Savers expects to end 2011 with a total of 290 stores and close to $1 billion in sales, Alterman said.

Its model differs from most resale stores in that Savers acquires most of its inventory by purchasing donated

items from nonprofit organizations. The nonprofits generate cash and Savers gets goods to sell. In Chicago,

Savers will be purchasing donated items from the Epilepsy Foundation of Greater Chicago.

Diana Ford, owner of the Women's Closet Exchange in St. Louis, believes there's a stigma attached to

resale shopping in some consumers' minds. She's out to convert them. Last fall, she issued a Groupon

charging $15 for $50 worth of goods. Of the 1,110 Groupon coupons redeemed, 900 were new customers,

she said. Most spent over the $50 limit of the coupon.

"Once they come in and see we had Louis Vuitton and Chanel, they can't go back. Even if the economy turns

around, people aren't going to go back to their old ways," she said.