Consumer and economic trends support resale clothing franchises’ sales growth.

Customers are increasingly shopping at consignment businesses for their apparel needs as inflation rates and ecological issues grow. According to retail analytics company GlobalData, the secondhand clothes market is anticipated to rise by 16 times its current size between 2021 and 2026. The American market for that is thought to be about $82 billion.The impact of that consumer spending is being felt by the segment’s franchises. Winmark, a multi-brand franchisor, experienced a record-breaking year for revenues at all of its almost 1,300 sites in 2021. Sales for the business exceeded $1.4 billion, and vice president of operations Brad Spencer reported that franchisees are still doing well this year. With around 1,300 locations, Winmark franchises resale concepts Plato’s Closet, Play It Again Sports, Once Upon a Child, Music Go Round, and Style Encore.

Franchisees leverage their local communities as a source of merchandise for their businesses, purchasing apparel, sporting goods, or musical instruments from people wishing to get go of some old items.

Customers receive value from both sides, according to Spencer. You may purchase items at incredibly low costs after selling us your gently used items.

Consumers who are looking for methods to cut costs on necessities like clothes during times of economic instability, like the 2008 housing crisis, are drawn to Winmark’s principles, according to Spencer. Additionally, its products addressed a “generational shift toward sustainability,” as described by Spencer.

Winmark recycled more than 159 million things in 2021, or around five articles every second. Over 1.4 billion items have been recycled by the company since 2010 across all of its outlets.

“Secondhand is gaining popularity. People are eager to participate in it, Spencer added.

According to Spencer, franchisees don’t really feel the effects of inflation on their shop prices since they buy old goods from customers. Franchisees have “done a pretty fantastic job of keeping their pricing down, and not raising them, to give value to customers,” he added. This is because they don’t have to pay extra transportation expenses to deliver items to their stores.

ThredUp and other online consignment shops have grown in prominence recently, and influencers on social media frequently advertise them. Play It Again: Music, Sports, and Style Go Round offers online buying options and ships pre-owned goods to clients who make online purchases. Online sales are not available for the lower-priced brands Plato’s Closet and Once Upon a Child.

A guitar can be sold and sent across the country more easily than a $4 suit, according to Spencer.

In 2020, the five-location designer consignment franchise The Closet Trading Co. opened its online shop. About 3 to 4 percent of the brand’s inventory is advertised online, which represents 10% of Closet Trading’s revenues.

According to CEO Johanna Zlenko, the business offers designer women’s clothing and accessories for sale.

Our ideal client is someone who cares about the environment and leads a sustainable lifestyle, according to Zlenko. She values ethical consumption, therefore.

The long-term sales picture for Zlenko is promising. People are driven to resale shops by economic downturns, and she pointed out that younger generations are gravitating toward thrift shops for their clothes. Authentic versions may now be found at discount prices at thrift stores thanks to the return of Y2K-era fashion.

We started selling that when we first began in 2003, according to Zlenko. Never have I felt older. It’s all returning.

Franchisees looking for cheaper startup expenses find the business concept appealing. Franchisees can avoid large upfront stock-purchase costs by selling items on consignment, according to Zlenko. They now have money to spend for other company requirements, she explained.

A Closet Trading Co. business may be opened for anywhere between $142,400 and $360,300. Item 19 of the brand’s franchise disclosure statement states that the company’s California locations’ average gross sales of $564,403 were comparable to those in 2019, before the epidemic.

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